Stocks had a rough Thursday as interest rates remained elevated and jobless claims were disappointing.
Dow Jones Industrial Average
fell 119.68 points, or 0.38%, to close at 31,493.34. The
fell 17.36 points, or 0.44%, to end at 3,913.97, and the
fell 100.14 points, or 0.72%, to close at 13,865.36. The biggest gainer in the S&P 500 was
(ticker: FE), which saw shares soar 7.2%, after billionaire activist Carl Ichan disclosed his firm wants to buy a stake in the company.
The selling pressure was evident in the Nasdaq 100, an index of large-cap stocks including tech’s biggest names, fell 0.45%. Electric-vehicle giant
(TSLA) and videoconferencing firm
Zoom Video Communications,
both components of the index, saw shares fall 1.4% and 2.7%, respectively; growth stocks, such as these two, are in general more sensitive to rising interest rates, which decrease the value of future cash flows. Meanwhile,
(KHC), another component of the Nasdaq 100, was emblematic of the tailwind higher rates typically give value stocks by seeing shares surge 5.2%, the index’s biggest gainer.
The 10-year Treasury yield remained at 1.3%, a relatively elevated level. The yield had stood at 1.1% just a week ago, and was at 0.9% on Jan. 4, before economic-growth-inflation expectations rose sharply.
But value stocks, which tend perform best when the economic outlook is brightening, didn’t rally broadly, either, though they outperformed growth. The
Vanguard S&P 500 Value Index
Fund (VOOV) fell 0.35%, whereas Wednesday—which featured a weak stock market—some value stocks actually rose.
An important piece of economic data, initial jobless claims for the past week, disappointed, coming in at 861,000, worse than the estimated 770,000. The actual result was lower than the prior reading of 848,000, however. This latest numbers threaten the positive outlook for the generally recovering labor market.
“There’s still a lot of economic carnage that has to play out for the next one or two quarters,” Brandon Pizzurro, portfolio manager at GuideStone Capital Management, told Barron’s.
Manufacturing data hit the wires Friday, and investors will be eyeing the results.
Write to Jacob Sonenshine at firstname.lastname@example.org