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Wall Street closed lower on Thursday as market participants assessed economic data that signaled a resilient U.S. economy. The Nasdaq Composite, the Dow, and the S&P 500 ended in negative territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.2% or 68.42 points to close at 43,153.13. Within the 30-stock index, 11 components ended in negative territory, while 19 ended positively. The major loser of the blue-chip index was UnitedHealth Group Incorporated UNH, suffering a 6% fall. UnitedHealth Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The tech-heavy Nasdaq Composite declined 172.94 points, or 0.9%, to 19,338.29.
The S&P 500 lost 0.2%, or 12.57 points, to end at 5,937.34. Three of the benchmark index's 11 broad sectors closed in the red. The Communication Services Select Sector SPDR (XLC), the Consumer Discretionary Select Sector SPDR (XLY) and the Technology Sector SPDR (XLK) fell 0.6%, 0.5% and 0.8%, respectively.
The fear-gauge CBOE Volatility Index (VIX) increased 3% to 16.60. A total of 14.31 billion shares were traded on Thursday, lower than the last 20-session average of 15.75 billion. The S&P 500 posted 21 new 52-week highs and nine new lows. The Nasdaq Composite recorded 58 new highs and 101 new lows.
U.S. Retail Sales and Jobless Claims Reflect Economic Resilience
The Department of Commerce reported that retail sales in December were up 0.4% compared with the consensus estimate of 0.7%. The metric for November was revised upward to an increase of 0.8% from 0.7% reported earlier. Retail sales were up 3.9% year over year, indicating positive consumer demand despite inflation.
Core retail sales (excluding auto) increased 0.4% in December but lagged the consensus estimate of 0.5%. The metric for November was an increase of 0.2%.
Labor market data also reflected resilience. The Labor Department reported on Thursday that jobless claims totaled 217,000 for the week ending Jan. 11, increasing 14,000 from the previous week’s revised level of 203,000. The four-week moving average was 212,750, a decrease of 750 from the previous week’s revised average of 213,500.
Continuing claims were 1,859,000, down 18,000 from the previous week’s revised level of 1,877,000. The 4-week moving average was 1,866,750, down 1,250 from the previous week's revised average of 1,868,000.
Investors expect the Federal Reserve to continue with its cautious approach to raising interest rates. December data highlight a resilient U.S. economy with strong consumer activity and a strong labor market, but uncertainties remain around inflation, geopolitical risks, and fiscal policy.