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Nasdaq, S&P 500 Finish Choppy Trading Session At New Record Highs

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June 13 2024 4:36PM

Stocks turned in a relatively lackluster performance during trading on Thursday, as traders took a breather following the rally seen in the previous session. Despite the choppy trading, the Nasdaq (NASDAQI:COMP) and the S&P 500 (SPI:SP500) once again reached new record closing highs.

The Nasdaq climbed 59.12 points or 0.3 percent to 17,667.56 and the S&P 500 rose 12.71 points or 0.2 percent to 5,433.74. The Dow (DOWI:DJI) once again bucked the uptrend, however, with the blue chip index slipping 65.11 points or 0.2 percent to 38,647.10.

The choppy trading on Wall Street came despite the release of U.S. economic data that seemed likely to add to optimism about the outlook for interest rates.

While the data may have generated some hopes Federal Reserve officials were being conservative when they forecast just one rate cut this year, traders may have been reluctant to continuing buying stocks following yesterday’s surge.

Following yesterday’s tamer-than-expected consumer price inflation data, the Labor Department released a report this morning unexpectedly showing a modest decrease by producer prices in the month of May.

The report said the producer price index for final demand dipped by 0.2 percent in May after climbing by 0.5 percent in April. Economists had expected producer prices to inch up by 0.1 percent.

The report also said the annual rate of producer price growth slowed to 2.2 percent in May from an upwardly revised 2.3 percent in April.

Economists had expected the annual rate of producer price growth to accelerate to 2.5 percent from the 2.2 percent originally reported for the previous month.

The Labor Department also released a separate report showing an unexpected increase by first-time claims for U.S. unemployment benefits in the week ended June 8th.

The report said initial jobless claims climbed to 242,000, an increase of 13,000 from the previous week’s unrevised level of 229,000. Economists had expected jobless claims to edge down to 225,000.

With the unexpected increase, jobless claims reached their highest level since hitting 248,000 in the week ended August 12, 2023.

“The latest data in hand nudge the door a little wider open for the Fed to begin making an interest rate cut later this year,” said Bill Adams, Chief Economist for Comerica Bank. “Comerica forecasts for the Fed to make its first cut of this cycle in September, followed by a second cut in December.”

Sector News

Semiconductor and computer hardware stocks showed strong moves to the upside on the day, contributing to the modest gain posted by the tech-heavy Nasdaq.

Reflecting the strength in the sectors, the Philadelphia Semiconductor Index and the NYSE Arca Computer Hardware Index climbing by 1.5 percent and 1.4 percent, respectively.

Within the semiconductor sector, shares of Broadcom (NASDAQ:AVGO) soared by 12.3 percent after the chipmaker reported better than expected fiscal second quarter results and announced a 10-for-1 stock split.

Meanwhile, gold stocks pulled back sharply along with the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 2.4 percent.

Oil service stocks also saw considerable weakness despite a modest increase by the price of crude oil, with the Philadelphia Oil Service Index tumbling by 2.1 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Thursday. Japan’s Nikkei 225 Index fell by 0.4 percent and China’s Shanghai Composite Index dipped by 0.3 percent, while Hong Kong’s Hang Seng Index and South Korea’s Kospi both jumped by 1.0 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the U.K.’s FTSE 100 Index slid by 0.6 percent, the German DAX Index and the French CAC 40 Index both plunged by 2.0 percent.

In the bond market, treasuries extended the strong upward move seen over the two previous sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell 5.7 basis points to a two-month closing low of 4.238 percent.

Looking Ahead

Trading on Friday may be impacted by reaction to the University of Michigan’s preliminary report on consumer sentiment in the month of June, which includes readings on inflation expectations.