Mid-Day Recap: Stocks Fall Fast After Lunch Hour
Mixed housing and labor reports caused equity markets to flounder on Thursday morning. Early gains were given up, and after a second climb appeared to give equities a clear positive direction for the day, all three indexes fell off a cliff a little after Noon.
Approaching 1pm, the S&P 500 is worst off with a 0.52% loss to 1,063. This follows a 3.11% gain earlier in the week, which put the benchmark index at new 11-month highs. The Nasdaq is a down a similar 0.51% as it trades at 2,122, and the Dow is 0.26% lower at 9,767. If stocks fail to recover, it will end a three-day rally.
Two data points an hour before the open were responsible for the indirection.
Housing starts bumped up 1.5% in August, pushing the annualized pace just below forecasts at 598,000. But the report’s key figure, single-family homes, slid 3.0% after four straight monthly gains.
It was a 35% gain in multi-family unit starts that pushed the index up this month, but that component can be volatile, so it’s shaky ground to base forecasts on. “This increase is hardly reason for cheer,” said Brian Bethune, chief financial economist at IHS Global Insight. “Multi-family permits and starts are both near all-time lows, and the near term outlook is hardly looking up.”
Bethune called the overall gain in starts “lackluster,” noting that the permits point to similar results in September and October.
The weekly jobless claims also featured a positive headline with less endearing details.
Weekly jobless claims moderated for the second consecutive week to 545,000, but the four-day week makes the data somewhat unreliable. Also, the number of people continuing to receive benefits unexpectedly climbed 129k to 6.23 million.
Despite the moderation, the broader picture remains the same: the unemployment rate is inching upwards to double-digits and job hirings remain slim.
“We believe we need to see an initial claims number around 400,000 to point to the resumption of modest job growth, which is necessary to stabilize the unemployment rate,” said John Ryding and Conrad DeQuadros, economists at RDQ.
The last bit of data for the day â€
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