Stock market today: Stocks rise as Dow tries to extend 6-day win streak
05/09/2024 23:21
Stocks have lost their bounce after a growing chorus of Federal Reserve officials made it clear that interest rates will need to stay higher for longer.
S&P 500 breaks back above 5,200
The S&P 500 (^GSPC) rose back above the 5,200 level for the first time in almost a month, as a jump in weekly jobless claims spurred expectations of Fed rate cuts this year.
The broader index rose 0.4%, touching its highest level since April 11.
Stocks rose as the yield on the 10-year Treasury (^TNX) moved lower to 4.48% following the Labor Department's latest jobless claim data released Thursday morning. Initial claims last week jumped to their highest levels since August.
Stocks solidly moved into green territory mid-morning led by gains of more than 200 points on the Dow Jones Industrial Average (^DJI).
Major averages in green territory, Dow jumps 200 points
The Dow Jones Industrial Average (^DJI) turned positive in early trading, rising as much as 200 to a session high. The index is on track for a seventh-day winning streak.
The S&P 500 (^GSPC) rose 0.3% while the tech-heavy Nasdaq Composite (^IXIC) flipped into green territory.
Real Estate (XRE) stocks led the gains, followed by Energy (XLE) and Materials (XLB).
Department of Labor data released this morning showed initial jobless claims jumped to 231,000 last week, their highest level since August. The print lifted investor expectations that the Federal Reserve will need to cut rates this year amid a slowing job market.
Real estate brokerages seek final approval of landmark settlements with homebuyers
Yahoo Finance's Alexis Keenan reports:
Three big real estate brokerage firms are heading to court Thursday, hoping to finalize sweeping settlements that promise dramatic changes to real estate commissions across the US.
Keller Williams, RE/MAX (RMAX), and Realogy (HOUS) are seeking final approval of three separate agreements with home sellers that amount to roughly $209 million.
That follows similar preliminary settlements of $418 million from the National Association of Realtors (NAR) and $250 million from Berkshire Hathaway (BRK-A) Energy’s HomeServices of America, which are set for final hearings in November.
The NAR and the real estate firms also agreed to changes in business practices that home sellers and buyers across the country allege are anticompetitive. The NAR, for example, will no longer require a broker listing a home for sale on the group’s MLS databases to offer any compensation to a buyer’s agent.
Read more here.
Stocks open mixed amid lackluster earnings
Stocks opened mixed on Thursday after a batch of lackluster earnings reports.
The Dow Jones Industrial Average (^DJI) dropped roughly 0.2%, indicating a reversal from the its six-day winning streak. The S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) rose just above the flatline.
In corporate earnings news, downbeat annual revenue forecast from Arm (ARM) sent shares of the chip designer lower by more than 9%. Sector peers Nvidia (NVDA) and AMD (AMD) opened slightly lower.
Warner Bros. Discovery (WBD) shares fell 3% after the company reported first quarter earnings that missed expectations on both the top and bottom lines. The media giant said it's "hopeful" for a deal with the NBA amid concerns the company may be at risk of losing media rights for the league to competitor NBCUniversal (CMCSA).
On the macroeconomic front, initial jobless claims jumped to 231,000 last week, their highest level since August. The Department of Labor print is another sign of a slowing jobs market following last month's jump in unemployment to 3.9%.
The data raises investors' expectations that the Federal Reserve will indeed have to cut rates this year to support the labor market.
Jobless claims hit highest level since August 2023
Weekly unemployment claims hit their highest level in nine months last week, surprising Wall Street and furthering signs that a red-hot labor market to start 2024 may be cooling.
Initial weekly jobless claims hit 233,000 in the week ending May 4, the highest level since August 2023 and well above the 212,000 economists had expected, per Bloomberg data.
But given claims have been low for much of the year, including in recent weeks, economists were hesitant to overreact to one week of data in a historically volatile series of economic data.
"We do not think that this is necessarily a sign of rapidly deteriorating conditions in the labor market," Jefferies US economist Tom Simons, who had been projecting a labor market slowdown at some point this year, wrote in a research note following the report.
He added: "The prints of the previous two weeks were the lowest for initial claims since mid-February, and claims remain locked in an improbably tight range for the last few weeks in the interim. They were bound to break at some point."
Oxford Economics lead US economist Nancy Vanden Houten said that given the surprise uptick, it will be important to follow the data series in the weeks ahead.
"If the higher level of claims persists or if claims rise further, it would be a sign of a further loosening in labor market conditions," Vanden Houten wrote in a note following. the release. "However, one week of data doesn't change our call for the Fed to keep interest rates at current levels until September."
The one line of caution in Tapestry's earnings report
Tapestry (TPR) shares are getting hit premarket after earnings.
Lots to unpack here, but this line jumped off the earnings release for me. It comes after several quarters of strength for the maker of Coach, Kate Spade and Stuart Weitzman accessories [emphasis added]:
"Realized a 3% decline in North America compared to the prior year, amid a challenging consumer backdrop."
Ahead of key CPI data release next week, one grocer weighs in
Hopefully you have May 15 off from work — the latest Consumer Price Index will be reported premarket and could trigger all sorts of market volatility.
I am sort of saying this tongue-in-cheek, sort of.
Nonetheless, the report is likely to show still elevated food prices for American shoppers. In large part those high prices are being found at the country's grocery stores.
So I put this simply question to Whole Foods CEO Jason Buechel at the Milken conference this week: Is there any relief coming in food prices?
Buechel told me he is working double time to ease the food shopping pain continuing to hammer households.
"I mean, this has obviously been on the minds of customers for a while now," Buechel said. "One of the things that we have been doing is working with all of our suppliers to find ways to minimize this impact. There are a number of ways that we have been doing this. One, we have increased the number of promotions for our customers, and as a result, we have actually seen double-digit [percentage] unit growth on promotional items."
Buechel continued, "We have also been putting some price investments in for our 365 items [private label]."
To say inflation at the supermarket has been on the minds of consumers may be an understatement — it may end up deciding the presidential election in November.
The cost of groceries increased by 1.2% in March, according to the latest CPI data out of the Bureau of Labor Statistics (BLS). It marked the first month of year-over-year acceleration in US grocery prices since August 2022.
Dating back to the heights of the COVID-19 pandemic in March 2020, the cost of food at home has risen a startling 24.6%.
So I appreciate the discounts at Amazon-owned (AMZN) Whole Foods, Jason.
Full watch of our chat below.
Hard to poke holes in Robinhood's quarter
Robinhood (HOOD) is getting a nice premarket pop after earnings last night.
The bears would say the first quarter is the high-water mark for Robinhood on the back of strong crypto trading volumes (crypto sales +232% year over year in the quarter). However, the realists would see a company that has come a long, long way from the meme stock insanity.
The company's new credit card is being released out into the wild, expenses are well under control, and the platform is really starting to suck in retirement assets from competitors.
Coming later this year will be index options.
I'm not on board with Bernstein's call this morning that Robinhood could double sales by the end of 2025. But, I could see how the company may prove me wrong.
Tune in to Yahoo Finance in the 3 p.m. ET hour for my chat with Robinhood co-founder and CEO Vlad Tenev.