US benchmark stock indexes fell as weekly jobless claims surprisingly declined while another Federal Reserve official called on the rate-setting committee to do “more” to ensure inflation retreats sustainably toward the central bank’s 2% target.
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The Dow Jones Industrial Average fell 0.8% to 33,039.1 after midday on Thursday. The S&P 500 declined 1% to 3,890.2, and the Nasdaq was 1.3% lower at 10,815.5. Consumer discretionary, industrials, and financials were among the worst performers, with all but two sectors, healthcare and communication services, in the red.
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The US two-year yield rose 4.8 basis points to 4.12%, and the 10-year yield climbed 3.8 basis points to 3.41% intraday.
Unemployment claims dropped to 190,000 during the week ended Jan. 14, the Department of Labor said Thursday. The consensus on Econoday was for an increase to 215,000. The previous week’s level was unrevised at 205,000. The latest print was the lowest in four months, according to Trading Economics.
“Given the recent uptick in layoff announcements coming from large businesses, it would be reasonable to expect claims to climb higher, but they are not,” Jefferies economists Thomas Simons and Aneta Markowska wrote in a note. There are a number of reasons why this might be, including the “relative ease with which workers are finding new jobs or employers are approaching job cuts through attrition rather than outright layoffs.”
December housing starts fell to a 1.382 million annual rate, above expectations compiled by Bloomberg for 1.358 million, from 1.401 million in November. Building permits declined to 1.330 million, below the 1.365 million anticipated and following a 1.351 million print in November.
While there has been evidence that higher interest rates are slowing the US economy and inflation, it is necessary for the Federal Open Market Committee to do more to ensure that path continues, Boston Federal Reserve Bank President Susan Collins said Thursday.
“While it is promising to see the effects of higher rates starting to spread from the most interest-sensitive sectors to the broader economy, more is required to ensure a steady path toward our inflation target,” Collins said. “As monetary policymakers, restoring price stability remains our imperative. Thus, I anticipate the need for further rate increases, likely to just above 5%, and then holding rates at that level for some time.”
West Texas Intermediate futures advanced 1.1% to $80.34 intraday.
Shares of Comerica (CMA) jumped 6.5% intraday, the biggest gainer on the S&P 500 after the firm reported higher earnings and revenue in the fourth quarter.