Investing.com– U.S. stocks reversed gains Thursday, as weaker economic data renewed concerns somewhat about the pace of slowing in the economy just a day ahead of Fed chairman Jerome Powell’s Jackson Hole appearence.
At 12:59 ET (16:59 GMT), the Dow Jones Industrial Average rose 120 points, or 0.29%, S&P 500 fell 0.5%, and NASDAQ Composite fell 0.8%.
Jobless claims in-line, manufacturing activity slips
Data released earlier Thursday showed that the number of Americans filing new applications for unemployment benefits rose 4,000 to a seasonally adjusted 232,000 in the latest week, adding to concerns of a cooling of the U.S. labor market.
This followed Wednesday’s payrolls revision, as the U.S. economy created 818,000 fewer jobs than originally reported in the 12-month period through March 2024.
The actual growth was nearly 30% less than the initially reported, with the revision to the total payrolls level being the largest since 2009.
Adding to concerns about the economy, manufacturing activity slipped more than expected.
The minutes of the Fed’s late-July meeting, released on Wednesday, also showed an increasing number of policymakers supported lowering interest rates amid progress in bringing down inflation.
Analysts at Citi said they see a 50 bps reduction as their base case for September, especially after Wednesday’s minutes showed more officials leaning towards lower rates.
Powell set to speak at Jackson Hole
Gains in Wall Street were held back by anticipation of an address by Fed Chair Jerome Powell, at the Jackson Hole Symposium on Friday.
Markets widely expect Powell to reiterate the central bank’s dovish stance, setting the stage for a September rate cut, although it remained unclear whether the Fed Chair will explicitly telegraph a September cut.
“We expect him to say that a lot of progress has been made on inflation, and the FOMC is confident that continued progress is likely in the coming year,” UBS said in a Wednesday note.
Peloton soars on turnaround momentum; Snowflake falls despite beat and raise;
The quarterly earnings season has seen more results Thursday, even as it draws to a close.
Peloton Interactive (NASDAQ:PTON) stock soared 34% after the connected fitness company returned to sales growth for the first time in nine quarters as its turnaround plan takes hold.
Snowflake (NYSE:SNOW) stock fell 13% after the enterprise software maker beat expectations for second-quarter earnings and revenue but offered tepid guidance that failed to assure investors in a competitive market.
“SNOW delivered solid results and an increase to guidance, though we believe investors were looking for stronger incremental Product Revenue after their strong first quarter,” Truist Securities said in a note.
Williams-Sonoma Inc (NYSE:WSM) fell 7% after the company reported mixed quarterly results as earnings missed but revenue beat Wall Street estimates.
Advance Auto Parts (NYSE:AAP) stock fell 17% after the automotive parts retailer reported disappointing second quarter earnings and slashed its full-year outlook, dashing earlier gains on the back of private equity firm Carlyle Group (NASDAQ:CG) saying it would buy its Worldpac unit for $1.5 billion in cash.
In other news, meanwhile, Paramount Global Class B (NASDAQ:PARA) rose 2% after announcing it would extend its “go shop” period of its merger agreement with Skydance allowing the company to entertain rival bids. The company also confirmed that it had received a rival offer from Edgar Bronfman Jr.
(Peter Nurse, Ambar Warrick contributed to this article.)
