4:07pm: Even with markets closed, traders will have an eye on the March jobs report Friday
The Dow closed Thursday up 3 points at 33,485, the Nasaq Composite added 91 points, 0.8%, to 12,088 and the S&P 500 improved 15 points, 0.$%, to 4,105. The small-cap Russell 2000 index ticked up 1 point to 1,754.
Despite the winning session, the S&P 500 finished the shortened trading week lower for the first time in four weeks.
The market will close tomorrow for Good Friday, but investors will still be watching for the March jobs report Friday morning.
Jobless claims data “lends credence to the idea that the Fed’s rate hikes are beginning to cool down the labor market and slow down the economy,” said Chris Zaccarelli, CIO at Independent Advisor Alliance. “The odds are much higher that it will cause a recession – and even a significant recession – than most people are currently willing to believe.”
12.05pm: Latest jobless claims higher than expected
US stocks were mixed in noon trading after softer-than-expected weekly jobless claims sparked recession fears ahead of Friday's key employment report for March.
At midday, the Dow lost 43 points to 33,440, while the S&P 500 added 5 points at 4,095 and the tech-heavy Nasdaq gained 56 points to 12,053.
“The Fed built a wall with interest rates and now the economy is running into it,” Harris Financial Group managing partner Jamie Cox said.
Notable movers included shares of Costco Wholesale Corporation, which shed nearly 3% after the bulk retailer reported weaker-than-expected March sales.
11:05am: Costco shares fall on weak March sales
Costco shares fell after the big box retailer reported its first monthly decline in same-store sales in nearly three years.
The company said in a statement that its total same-store sales fell 1.1% in the retail month of March, being the five weeks that ended April 2, 2023, down from increases of 3.5% and 5.6% in February and January, respectively.
Costco shares were trading down 3.2% at US$481.40 on Thursday morning.
9:40am: Jobless claims data shows clear rising trend
US stocks fell at the open as traders held off from making any big moves ahead of Friday’s key jobs report.
The tech-heavy Nasdaq led stocks lower, down 80 points or 0.7% at 11,917 points, while the S&P 500 was down 15 points or 0.4% at 4,075 points, and the Dow Jones had shed 64 points or 0.2% at 33,419 points.
Meanwhile, weekly initial jobless claims for the week ended April 1 came in higher than expected. The number of claims was 228,000, above the consensus expectation of 200,000. The prior week’s figure was revised up to 246,000.
On Wednesday, data from private payroll firm ADP showed employers added 145,000 jobs in March, far below the consensus expectation of 210,000.
Pantheon Macroeconomics chief economist Ian Shepherdson said the huge revision to last week’s jobless claims data revealed a clear rising trend.
“The new data for the past two months show a much higher level of claims and a rising trend; the four-week average now stands at 231,000, the highest since February 2022,” he said.
“Looking ahead, the surge in layoff announcements captured in the Challenger survey points clearly to much higher jobless claims over the next few months.”
He said a rising trend in claims had been a key missing part of the labor market story, but it was now clear layoffs are increasing, while other data, notably the NFIB survey, pointed to much slower gross hiring.
“We still expect a 250,000 increase in March payrolls tomorrow, but we look for only 150,000 in April and we see a decent chance of zero readings around mid-year, consistent with our view that the economy is heading rapidly into a spring/summer recession,” Shepherdson said.
“These data alone won’t stop the Fed from raising rates again in May, but they are a warning sign that should not be ignored.”
9:05am: Constellation Brands ups dividend
Shares of Constellation Brands fell in early New York premarket trading but recovered just before opening to levels around 0.7% above closing levels after the beverage company reported its fiscal fourth quarter 2023 earnings showing better-than-expected profit despite weaker revenue.
For the three-month period to end February 22, 2023, Constellation posted comparable earnings per share (EPS) of $1.98, topping analyst estimates of $1.84.
Revenue for the quarter came in at $2 billion versus the consensus estimate of $2.01 billion.
Overall, sales declined 5% year-over-year as Wine and Spirits shipments fell 22.1%.
The beverage group also upped its dividend payments by 11% to $0.89 per share.
8:15am: Credit Suisse, Silicon Valley Bank shorts raised billions in March
Hedge funds raised billions from taking up short positions against lenders in March, as the collapse of Silicon Valley Bank (SVB) sent ripples across the global financial sector.
US$1.3 billion was raised through short positions against Silicon Valley Bank, according to data firm Ortex, while US$848 million and US$684 million was made through bets against First Republic and Credit Suisse Group AG (NYSE:CS) repectively.
A total of US$7.2B was raised across the US and Europe as hedge funds capitalised on the chaos of SVB’s collapse by selling borrowed banking shares to buy back later at a lower price.
6:30am: Jobs overshadow
US stocks are looking at another cautious start on Thursday as investors try to wind down ahead of the long holiday weekend with one eye focused on the key March non-farm payrolls report which will be released when markets are closed on Good Friday.
In pre-market trading, futures for the blue-chip Dow Jones Industrials Average (DJIA) were up 0.1%, but those for the broader S&P 500 index shed 0.1%, and contracts for the Nasdaq-100 fell 0.4%.
On Wednesday, the DJIA closed 80 points, 0.2% higher at 33,483, while the S&P 500 fell 0.3%, and the Nasdaq Composite dropped 1.1%. The Nasdaq finished lower for the third session in a row.
Traders will eye the latest weekly jobless claims on Thursday which will offer further insight into the health of the labor market following two reports earlier this week that showed signs of weakness. Other data suggested a slowdown in manufacturing activity has added to market jitters.
Joshua Mahony, chief market analyst at Scope Markets commented: "Wall Street is looking at a flat start to the final session of the week, with opinions still divided as to what happens next for the US economy.
"However, with economic news released in the last couple of days becoming distinctly more gloomy and the fact that the non-farm payrolls will be published tomorrow when markets are closed for Good Friday, it’s becoming increasingly difficult to justify the idea that major US indices remain close to year to date highs.
"Economic data releases today are limited and it’s going to be tomorrow’s employment stats that carry the greatest weight. If we don’t see a shakedown before the end of Thursday’s session then when trading resumes on Monday."