Stocks close lower, S&P 500 approaches bear market territory
Philadelphia Fed's manufacturing index dropped to 2.6 in May from 17.6 the previous month, its lowest reading in two years
Piper Sandler chief investment strategist Michael Kantrowitz tells investors to stay defensive, and not to call a market bottom until 2023.
U.S. stocks closed lower on Thursday as concerns over Federal Reserve interest rate hikes and high inflation continued to worry investors.
The Dow Jones Industrial Average was down 236.94 points, or 0.75%, while the Nasdaq Composite fell 0.26%. The S&P 500, which ended the session 0.58% lower, approached bear market territory.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 41794.6 | -257.59 | -0.61% |
| SP500 | S&P 500 | 5712.69 | -16.11 | -0.28% |
| I:COMP | NASDAQ COMPOSITE INDEX | 18179.984429 | -59.93 | -0.33% |
The 10-year Treasury yield climbed above 2.8% during Thursday's session. Oil is trading at around $109 per barrel.
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On the economic data front, new U.S. jobless claims rose to a four-month high of 218,000 for the week ending May 14, up from 197,000 the previous week, according to the Labor Department. Continuing claims, or the number of people already collecting unemployment benefits, fell to 1.317 million for the week ending May 7, the lowest level since December 1969.
The Philadelphia Fed's manufacturing index dropped to a reading of 2.6 in May from 17.6 the previous month, marking the lowest level of activity in two years.
Existing-home sales fell for the third straight month in April to a seasonally adjusted annual rate of 5.61 million. Sales were down 2.4% from the prior month and 5.9% from one year ago. The median existing-home sales price increased at a slower year-over-year pace of 14.8% to $391,200. With slower demand, the inventory of unsold existing homes climbed to 1.03 million by the end of April, or the equivalent of 2.2 months of the monthly sales pace.
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In earnings, BJ's Wholesale Club beat Wall Street expectations with adjusted earnings per share of 87 cents on revenue of $4.5 billion. The stock climbed more than 7% during Thursday's trading session.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BJ | BJS WHSL CLUB HLDGS INC | 86.75 | +1.11 | +1.30% |
| KSS | KOHL'S CORP. | 18.02 | -0.08 | -0.44% |
Meanwhile, Kohl's finished up more than 4% after the retailer posted lower but better-than-expected revenue of $3.72 billion. However, the company missed Wall Street estimates with adjusted quarterly earnings of 11 cents per share and slashed its full-year earnings guidance.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ROST | ROSS STORES INC. | 140.66 | +0.60 | +0.43% |
| VFC | VF CORP. | 21.48 | +0.43 | +2.04% |
| AMAT | APPLIED MATERIALS INC. | 181.82 | -1.56 | -0.85% |
Ross Stores, V.F. Corp. and chip equipment maker Applied Materials are all set to deliver results after the bell on Thursday.
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Spirit Airlines' board of directors is urging the company's shareholders to reject JetBlue Airways' $30 per share tender offer. Spirit, which has agreed to merge with Frontier Airlines, has said a potential JetBlue transaction would have trouble receiving regulatory approval.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SAVE | SPIRIT AIRLINES INC. | 2.34 | -0.13 | -5.26% |
| JBLU | JETBLUE AIRWAYS CORP. | 5.71 | -0.06 | -1.04% |
| ULCC | FRONTIER GROUP HOLDINGS | 5.70 | -0.27 | -4.52% |
Cisco Systems is down more than 13% after cutting its full-year forecast. The company reported adjusted earnings per share of 87 cents on revenue of $12.84 billion. The networking equipment maker said its revenue during the quarter was negatively impacted by COVID lockdowns in China and the war in Ukraine.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CSCO | CISCO SYSTEMS INC. | 55.83 | +0.33 | +0.59% |
Bath & Body Works has fallen more than 6% after cutting its full-year earnings guidance due to inflation and increased investments. The company reported better-than-expected earnings of 64 cents per share on revenue of $1.45 billion.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| BBWI | BATH & BODY WORKS INC. | 31.28 | +2.36 | +8.16% |
Under Armour stock tumbled more than 11% following a downgrade from Morgan Stanley and news that CEO Patrik Fisk would step down effective June 1.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UAA | UNDER ARMOUR INC. | 8.64 | +0.12 | +1.41% |
Target slipped another 5% after shedding nearly 25% on Wednesday. The company reported better-than-expected revenue of $25.17 billion during its first fiscal quarter of 2023 but missed Wall Street estimates with adjusted earnings per share of $2.19 due to higher costs and inventory.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TGT | TARGET CORP. | 149.99 | -0.85 | -0.56% |
Harley-Davidson dropped over 9% after the company said it would suspend all vehicle assembly and shipments, excluding LiveWire, for two weeks.
"This decision, taken out of an abundance of caution, is based on information provided by a third-party supplier to Harley-Davidson late on Tuesday (5/17) concerning a regulatory compliance matter relating to the supplier's component part," the company said in a statement.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| HOG | HARLEY-DAVIDSON INC. | 31.82 | -0.05 | -0.16% |
In Asia, Tokyo's Nikkei 225 gave up 1.8%, Hong Kong’s benchmark plunged 2.5%, South Korea’s Kospi fell 1.2% and China's Shanghai Composite index rose 0.3%. In Europe, the Stoxx50 sank 1.3%, the CAC40 slipped 1.2%, the FTSE100 slid 1.8% and the DAX dipped 0.9%.
Bitcoin is trading at the $30,000 per coin level.