4:24pm: Adobe shares swoon on Figma acquisition deal
The Dow closed Thursday down 173 points, 0.6%, at 30,962, the Nasdaq Composite lost 167 points, 0.4%, to 11,552 and the S&P 500 shed 45 points, 1.1%, to 3,901. Thursday marked the Dow's lowest close since July 14.
The benchmarks saw a pair of mini-rallies during the session, but the gains were quickly erased. One particular drag was Adobe Inc, shares of which tumbled more than 16% after the company announced a $20 billion deal to buy software firm Figma.
Meanwhile, investors continue to grapple with what the Federal Reserve will do on interest rates, according to Mike Loewengart, head of model portfolio construction at Morgan Stanley (NYSE:MS).
“The Fed needs to pick their poison. Do you continue strong ahead to tamp down inflation at the risk of recession, at the risk of increasing unemployment? It’s truly a dilemma, but I think that given what we have heard from the Fed the focus is squarely on inflation,” Loewengart said, as reported by CNBC.
12.05pm: US markets running red
The major US indices remained in the red midday as investors found it difficult to warrant buying stocks, cryptos and other risk-sensitive assets.
At midday, the Dow Jones Industrial Average was down 0.4% to 31,002, while the S&P 500 was down by 0.9% at 3,911, and the Nasdaq Composite was down by 1.1% at 11,588.
Fawad Razaqzada, market analyst with City Index and FOREX.com, said US futures had rallied into the close late last night, but since the Asian open, the markets have drifted lower to the point where US indices had given up gains made the day before.
“When Wall Street opened, we again saw a pop in risk assets before the inevitable dump that saw the indices hit new lows on the week. We also saw gold hit a new low for the year sub US$1,680 as rising interest rate expectations continue to weigh on zero-yielding assets. The Nasdaq looks poised to head even lower,” Razaqzada said in a statement.
Razaqzada noted that today’s US data did little to change the market’s view of what the Federal Reserve might do next week.
“Investors are confident the US central bank will tighten monetary policy by 75 basis points on Wednesday, something which could push the economy into slowdown and cause earnings to decline,” Razaqzada said.
At midday, the major movers included Wynn Resorts (NASDAQ:WYNN), up by 9% on news a Credit Suisse analyst upgraded the stock to Outperform. Health company Humana was up by 6.7%, Netflix was up by 4.9% and Royal Caribbean rose by 4.6%.
On the downside, Adobe plunged by over 17% on news of its US$20 billion purchase of online design tools maker Figma, while Abermarle and Valero Energy (NYSE:VLO) both fell by 5.3%.
11.48am: Proactive North America headlines:
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Cinedigm debuts free streaming service Cineverse, plans to add more than 10,000 films and TV episodes by year end
Hapbee Technologies extends device line-up with Hapbee Smart Sleep Pad
Nextleaf to launch Glacial Gold products in Ontario and British Columbia markets
PyroGenesis ranked amongst the Top 10 best-performing stocks on the Toronto Stock Exchange
ION Energy kicks off drilling at its Urgakh Naran lithium brine project in Mongolia
Gungnir Resources reveals 'impressive drill intercept of massive sulphides' at Lappvattnet nickel deposit
Sidus Space to continue producing hardware for key customer Parsons Corporation
X1 Esports moves one step closer to becoming ultimate Rocket League fan hub with Octane.GG acquisition
Wellbeing Digital Sciences (NEO:MEDI.AQN, OTCQB:KONEF) posts fiscal 4Q results; projects significant revenue from research and consulting contracts
Viscount Mining completes drill program at Kate deposit in Colorado; confirms higher-grade silver zone
GreenBank Capital says its portfolio company Ubique Minerals will buy 90% of Namibian mining firm
Tiziana Life Sciences says Brigham and Women's Hospital gets grant to explore use of intranasal anti-CD3 mAb in ALS
Nextech AR Solutions appoints Melea Guilbault as new CEO of its Map D event tech platform
EverGen Infrastructure upgraded to OTCQX market in the US
Group Eleven Resources announces restart of drilling at Stonepark zinc prospect in Ireland
Plurilock Security says its Aurora Systems subsidiary wins orders totalling US$7.3M in August
9.40am: Retail sales rise, initial unemployment claims fall
US stocks dipped at the open on Thursday as investors digested a slew of economic data released this week, including hotter-than-expected inflation data which saw stocks tumble to record their worst day since June 2020 on Tuesday.
Just after the open, the Dow Jones Industrial Average had shed 72 points or 0.2% at 31,064 points, the S&P 500 was down 18 points or 0.5% at 3,928 points, and the Nasdaq Composite had slipped 74 points or 0.6% at 11,646 points.
US retail sales unexpectedly rose in August, according to data released this morning by the Commerce Department.
Retail sales increased by 0.3% in August, compared to the median analyst expectation of a 0.1% drop in sales. Revised data showed retail sales fell 0.4% in July.
Meanwhile, initial jobless claims have fallen for a fifth straight week, according to the Department of Labor.
Claims for the week ended September 10 fell by 5,000 from the previous week’s revised level to 213,000, coming in well below the consensus analyst expectation of 227,000.
6.30am: Focus on economic data
US stocks were expected to start slightly higher on Thursday as investors focus ahead on another batch of economic data following this week's consumer price index (CPI) inflation disappointment.
Futures for the Dow Jones Industrial Average were ahead 0.2% in pre-market trading, while those for the S&P 500 also added 0.2%, and Nasdaq 100 futures ticked 0.1% higher.
After recent CPI-inspired plunges, the Dow closed 0.1% higher on Wednesday, while the S&P 500 rose 0.3%, and the Nasdaq Composite added 0.7%, recovering tentatively from falls earlier in the session.
Stocks sought stability after posting their worst session since 2020 on Tuesday following the above-forecast inflation reading. August’s CPI showed headline inflation rose 0.1% on a monthly basis, despite a drop in gas prices.
Wednesday’s producer price index (PPI) report showed a decrease in wholesale prices of 0.1% in August, which provided him some comfort.
Craig Erlam, senior market analyst, UK & EMEA, OANDA commented: "Stock markets are a bit mixed on Thursday following a rollercoaster week in the run-up to, and aftermath of, the US inflation report.
"Safe to say, investors got ahead of themselves in a desperate attempt to board the peak inflation train early. The collapse on Tuesday - carrying into Wednesday in Asia and Europe - looked quite severe on the face of it but it was simply an unwinding of positions built on the anticipation of a good set of numbers in the days leading up to it."
He added: "While the Fed is now almost certain to hike by 75 basis points next week and more in the months that follow than previously anticipated, the view still seems to be that Tuesday was a setback rather than a game changer. Confidence that we are at or near peak inflation is dented but not broken and this week serves as a reminder that as was the case on the way up, the path back to 2% will likely be littered with nasty surprises."
Investors will have US retail sales, import prices and weekly jobless claims, as well as the Philadelphia Fed manufacturing survey and the Empire State manufacturing survey to mull over today, all due at 8.30am ET.
Contact the author at jon.hopkins@proactiveinvestors.com