Closing Stock Market SummaryThe S&P 500 declined 0.7% on Thursday, as the market consolidated its gains from the prior three days. The Nasdaq Composite (-1.7%) and Russell 2000 (-2.3%) struggled with steeper losses, while the Dow Jones Industrial Average (unch) closed flat after being down 0.5% intraday.
Nine of the 11 S&P 500 sectors closed lower, including the consumer discretionary (-1.7%), information technology (-1.1%), and real estate (-1.4%) sectors with losses over 1.0%. The defensive-oriented health care (+0.3%) and consumer staples (+0.1%) sectors closed higher.
Fatigue seemed to reign in the market on the recognition that the S&P 500 gained 3.6% over the past three days and Apple (AAPL 174.56, -0.52, -0.3%) gained 11.2% over the same period. Apple lost 0.3% today, even though Morgan Stanley named the stock a Top Pick for 2022 with a Street-high price target of $200.
The biggest gainers between Monday and Wednesday were the biggest losers today, and those were typically the risker stocks in the Nasdaq and Russell 2000. The ARK Innovation ETF (ARKK 97.73, -5.49, -5.3%), which entered the session up 10% for the week, declined 5% today.
In addition, there was a sense of caution in front of the Consumer Price Index report for November, which will be released tomorrow morning. Longer-dated Treasuries edged higher, the CBOE Volatility Index rose 8.4% to 21.58, and the U.S. Dollar Index rose 0.4% to 96.23.
The 10-yr yield decreased two basis points to 1.49% despite weekly initial claims falling to their lowest level (184,000) since Sept. 6, 1969. The 2-yr yield was unchanged at 0.68%. WTI crude futures fell 2.2%, or $1.56, to $70.87/bbl.
In other developments, the Senate passed a procedural bill to allow the debt ceiling to be raised by a fixed amount, and the FDA expanded the eligibility for the Pfizer (PFE 52.08, +0.68, +1.3%)-BioNTech (BNTX 284.21, -7.73, -2.7%) COVID-19 booster shot to 16- and 17-year-olds.
CVS Health (CVS 97.31, +4.21, +4.5%) was an individual standout after providing upbeat guidance and authorizing a $10 billion share repurchase program.
Reviewing Thursday's economic data:
- Initial claims for the week ending December 4 dropped by 43,000 to 184,000 (consensus 228,000). That is the lowest level since September 6, 1969. Continuing claims for the week ending November 27 increased by 38,000 to 1.992 million.
- The key takeaway from the report is that seasonal factors had a lot to do with the sizable drop in initial claims. On an unadjusted basis, initial claims increased by 63,680 to 280,665.
- Wholesale inventories increased 2.3% m/m in October (consensus 2.2%) following a 1.4% increase in September.
Looking ahead, investors will receive the Consumer Price Index for November, the preliminary University of Michigan Index of Consumer Sentiment for December, and the Treasury Budget for November on Friday.
- S&P 500 +24.3% YTD
- Nasdaq Composite +20.4% YTD
- Dow Jones Industrial Average +16.8% YTD
- Russell 2000 +12.4% YTD