Market Wrap for Thursday February 7: Stocks Fall on Steep Euro Decline
The euro fell against the greenback on Thursday after ECB head Mario Draghi made some cautious comments on the state of the Eurozone. He said that the currency's recent strength is a good sign, but that it might stifle economic growth in the region. The lower euro and recent rumblings surrounding Europe curbed risk appetite on the session with all of the major averages closing in negative territory. The U.S. stock market, however, finished well off of its worst levels of the day.
The Dow Jones Industrial Average fell 42 points, or 0.30 percent, to 13,944.
The S&P 500 lost around 3 points, or 0.18 percent, to 1,509.
The Nasdaq Composite shed a little more than 3 points, or 0.11 percent, to close at 3,165.
Initial jobless claims for the week ending February 2 fell to 366,000 versus 371,000 for the week ending January 26. This compares to consensus estimates of 365,000.
Continuing claims rose from 3.216 million for the week ending January 19 to 3.224 million for the week ending January 26. This was above consensus estimates calling for a decrease to 3.200 million.
Productivity and Unit Labor Costs
Nonfarm labor productivity fell 2 percent in the fourth-quarter of 2012 versus an increase of 3.2 percent in the third-quarter. This was more than the consensus estimate of a decrease of 1.2 percent.
Unit labor costs rose to 4.5 percent for the fourth-quarter after declining 2.3 percent in Q3. This was the largest increase since Q1 2012. The consensus forecast was for an increase of 3 percent.
Consumer credit continued to show strong growth in December. Consumer credit rose $14.6 billion in the month versus an increase of $15.9 billion in November. The December figure was above consensus estimates of $11.9 billion.
Crude oil was mixed on the session. NYMEX crude futures, the U.S. benchmark, were down 0.88 percent to $95.77 at last check. Brent futures had notched a gain of 0.46 percent to $117.27 late in the day.
Precious metals followed stocks lower on Thursday. Near the equity close, COMEX gold futures had lost 0.36 percent to $1,673 while silver was down more than 1 percent to $31.49.
In the agricultural complex, corn was last down around 1.63 percent and wheat had lost 0.72 percent. In soft commodities, coffee futures had shed around 1.27 percent.
Late in the day, the iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) had lost 0.21 percent to $116.67. Bond yields were mixed.
The 2-Year Note held steady at 0.25 percent while the 5-Year and 10-Year yields fell one basis point to 0.82 percent and 1.95 percent, respectively. The 30-Year Bond yield rose 1 basis point to 3.16 percent.
The U.S. Dollar was strongly higher on the day as risk appetite was limited by a falling euro. The PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the greenback versus a basket of foreign currencies, rose 0.55 percent to $21.89 on the session.
The closely watched EUR/USD pair was last trading down 0.87 percent to $1.3403. The Yen, which has been falling dramatically against the greenback, rose around 0.09 percent on Thursday.
Volatility and Volume
The VIX only closed very moderately higher on Thursday despite a decline in stock prices. The widely watched volatility index rose around 1 percent to 13.54.
Volume was a little heavier than in recent sessions but remained below the 3-month moving average. Around 128 million SPDR S&P 500 ETF (NYSE: SPY) shares traded hands compared to a 3-month daily average of 139 million.
Akamai Technologies (NASDAQ: AKAM) plunged more than 15 percent after releasing its Q4 earnings results after Wednesday's close.
TriQuint Semiconductor (NASDAQ: TQNT) fell almost 13 percent on the day after its Q4 earnings.
ViaSat (NASDAQ: VSAT) jumped more than 24 percent after better than expected Q3 results.
Geospace Technologies (NASDAQ: GEOS) surged more than 17 percent after strong Q1 earnings results.
O'Reilly Automotive (NASDAQ: ORLY) climbed 8 percent after releasing its Q4 earnings results after the closing bell on Wednesday.
DeVry (NYSE: DV) rose sharply after its Q2 report. The stock closed up more than 16 percent.
Women's apparel retailer Ann Inc. (NYSE: ANN) lost almost 8 percent after lowering its Q4 sales outlook.
Bunge Limited (NYSE: BG) fell 9 percent after releasing disappointing Q4 results.
Casino-operator Caesars Entertainment (NYSE: CZR) jumped almost 19 percent in afternoon trade after New Jersey Governor Chris Christie conditionally vetoed a bill that would allow Atlantic City casinos to accept bets over the internet. The governor only requested minor changes to the bill, which will likely be implemented by September.
Competitor Boyd Gaming (NYSE: BYD), which manages the Borgata, closed up a little less than 3 percent to $7.10.
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