Benchmarks ended slightly lower on Thursday after hitting record highs on the previous day after the European Central Bank failed to provide solid clues about further monetary stimulus. Moreover, investors were also cautious ahead of Friday's nonfarm employment report. However, encouraging jobless claims report limited some of the losses on Thursday.
For a look at the issues currently facing the markets, make sure to read today's Ahead of Wall Street article
The Dow Jones Industrial Average (DJI) declined almost 0.1% to close at 17,900.10. The Standard & Poor 500 (S&P 500) decreased 0.1% to close at 2,071.92. The tech-laden Nasdaq Composite Index closed at 4,769.44; also losing 0.1%. However, the fear-gauge CBOE Volatility Index (VIX) declined 0.7% to settle at 12.38. A total of about 6.02 billion shares were traded on Thursday. Decliners outpaced advancing stocks on the NYSE. For 62% stocks that declined, 35% advanced.
In the meeting on Thursday, the European Central Bank (ECB) President Mario Draghi indicated that the ECB may consider additional monetary stimulus in the Eurozone to revive the economy. However, he also added that monetary expansion may be provided by early 2015. He said: “Early next year the Governing Council will reassess the monetary stimulus achieved, the expansion of the balance sheet and the outlook for price developments.” Benchmarks were dragged down following the meeting as investors had expected that expansion may occur sooner.
Moreover, ECB also kept the interest rate unchanged at record level of 0.05%. ECB also lowered its guidance for next year's economic growth in the common currency bloc. The central bank now expects that the economy will grow at a pace of 1%, down from its earlier projection of 1.6%. Draghi stated that decline in oil prices will increase deflationary pressure in the area.
Investors also remained cautious about the jobs report which is due to be released today. Private data provider Automatic Data Processing, Inc. (ADP) reported on Wednesday that the economy had generated 208,000 new jobs in November, which was below October's and September's numbers of 233,000 and 213,000, respectively. However, November's tally indicated that the economy witnessed eighth straight month of job gains in excess of 200,000. The consensus estimate for jobs created in November is 226,000.
However, positive initial claims data helped benchmarks avoid further losses on Thursday. Jobless claims for the week ending Nov 29 came in at 297,000, declining from earlier week's number of 314,000. But the tally remained above the consensus estimate of 288,000.
Separately, shares of Sears Holdings Corporation (SHLD) declined 4.4% after posting third quarter loss per share of $5.15, wider than the year-ago quarter's loss per share of $5.03. The company also reported 13.3% year-over-year decline in quarterly revenues to $7.2 billion.
Barnes & Noble, Inc.'s (BKS) shares dropped 5.4% after reporting second quarter earnings per share of 12 cents, missing the Zacks Consensus Estimate of 17 cents. Moreover, the U.S. book seller also announced that it is terminating its commercial agreement regarding its Nook e-book reader with Microsoft Corporation (MSFT).
On Thursday, the prices of WTI crude oil and Brent crude oil declined 0.9% and 0.4% to $66.81 per barrel and $69.64 per barrel, respectively. Decline in oil prices negatively impacted the Energy Select Sector SPDR (XLE), which declined 0.9%. The sector was the biggest loser among the S&P 500 sectors. Key energy stocks including Chevron Corporation (CVX), Helmerich & Payne, Inc. (HP), Chesapeake Energy Corporation (CHK) and Marathon Oil Corporation (MRO) lost 1.3%, 1.5%, 2% and 2.3%, respectively. Seven out of 10 S&P 500 sectors registered losses on Thursday.
For a look at the issues currently facing the markets, make sure to read today's Ahead of Wall Street article
The Dow Jones Industrial Average (DJI) declined almost 0.1% to close at 17,900.10. The Standard & Poor 500 (S&P 500) decreased 0.1% to close at 2,071.92. The tech-laden Nasdaq Composite Index closed at 4,769.44; also losing 0.1%. However, the fear-gauge CBOE Volatility Index (VIX) declined 0.7% to settle at 12.38. A total of about 6.02 billion shares were traded on Thursday. Decliners outpaced advancing stocks on the NYSE. For 62% stocks that declined, 35% advanced.
In the meeting on Thursday, the European Central Bank (ECB) President Mario Draghi indicated that the ECB may consider additional monetary stimulus in the Eurozone to revive the economy. However, he also added that monetary expansion may be provided by early 2015. He said: “Early next year the Governing Council will reassess the monetary stimulus achieved, the expansion of the balance sheet and the outlook for price developments.” Benchmarks were dragged down following the meeting as investors had expected that expansion may occur sooner.
Moreover, ECB also kept the interest rate unchanged at record level of 0.05%. ECB also lowered its guidance for next year's economic growth in the common currency bloc. The central bank now expects that the economy will grow at a pace of 1%, down from its earlier projection of 1.6%. Draghi stated that decline in oil prices will increase deflationary pressure in the area.
Investors also remained cautious about the jobs report which is due to be released today. Private data provider Automatic Data Processing, Inc. (ADP) reported on Wednesday that the economy had generated 208,000 new jobs in November, which was below October's and September's numbers of 233,000 and 213,000, respectively. However, November's tally indicated that the economy witnessed eighth straight month of job gains in excess of 200,000. The consensus estimate for jobs created in November is 226,000.
However, positive initial claims data helped benchmarks avoid further losses on Thursday. Jobless claims for the week ending Nov 29 came in at 297,000, declining from earlier week's number of 314,000. But the tally remained above the consensus estimate of 288,000.
Separately, shares of Sears Holdings Corporation (SHLD) declined 4.4% after posting third quarter loss per share of $5.15, wider than the year-ago quarter's loss per share of $5.03. The company also reported 13.3% year-over-year decline in quarterly revenues to $7.2 billion.
Barnes & Noble, Inc.'s (BKS) shares dropped 5.4% after reporting second quarter earnings per share of 12 cents, missing the Zacks Consensus Estimate of 17 cents. Moreover, the U.S. book seller also announced that it is terminating its commercial agreement regarding its Nook e-book reader with Microsoft Corporation (MSFT).
On Thursday, the prices of WTI crude oil and Brent crude oil declined 0.9% and 0.4% to $66.81 per barrel and $69.64 per barrel, respectively. Decline in oil prices negatively impacted the Energy Select Sector SPDR (XLE), which declined 0.9%. The sector was the biggest loser among the S&P 500 sectors. Key energy stocks including Chevron Corporation (CVX), Helmerich & Payne, Inc. (HP), Chesapeake Energy Corporation (CHK) and Marathon Oil Corporation (MRO) lost 1.3%, 1.5%, 2% and 2.3%, respectively. Seven out of 10 S&P 500 sectors registered losses on Thursday.
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AUTOMATIC DATA (ADP): Free Stock Analysis Report
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HELMERICH&PAYNE (HP): Free Stock Analysis Report
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