The stock market continued its slide Thursday, despite data showing the tight job market may be loosening up. Weak reports from Roku, Moderna and Qualcomm weighed on the ticker tape.
The Nasdaq composite was down 1.4%. The Dow Jones Industrial Average lost 0.4% and the S&P 500 dropped 0.8%. The small-cap Russell 2000 index lost 0.2%.
Volume rose on both the NYSE and the Nasdaq vs. the same time on Wednesday.
The yield on the benchmark 10-year Treasury note rose 7 basis points to 4.17%.
Crude oil fell 1.4% to $88.72 per barrel.
Technology stocks were hit the hardest. The S&P Technology Select Sector ETF was down 2.1%, making it the worst-performing of the 11 S&P sectors.
Employment News Weighs On Stock Market
First-time jobless claims held steady at 217,000, below Econoday estimates that called for a 222,000 rise. Unit labor costs rose 3.5% in the third quarter, down from 8.9% in Q2, and slightly lower than the 4% consensus. Declining labor costs may signal weaker job growth in coming months. That could support higher stock market prices.
"Initial jobless claims have been steady recently but continued claims are up 102,000 in the last two weeks' releases, a sign hiring is slowing," said Bill Adams, chief economist for Comerica Bank. "While job openings are still high, employers are becoming more hesitant to fill openings."
Meanwhile, the U.S. Services Purchasing Managers Index (PMI) registered 47.8 in October, down from 49.3 in September.
"Service sector firms faced a challenging start to the final quarter of 2022, as a renewed contraction in new business dragged output down further," said Sian Jones, senior economist at S&P Global Market Intelligence.
The Institute for Supply Management index was also lower at 54.4, down from 56.7 in September and below the consensus of 55.4.
European markets were mixed on Thursday after the Bank of England followed yesterday's Fed rate hike, raising interest rates by 0.75%. The central bank lifted its benchmark lending rate to 3% from 2.25%, taking it to the highest level since November 2008.
The London FTSE 100 rose 0.2%, the German DAX fell 1.2% and the French CAC 40 dropped 0.8%. In Asia, the Hang Seng index in Hong Kong fell 3%.
On Wednesday, the U.S. stock market fell after the 75 basis point rate hike and Fed Chair Jerome Powell's hawkish comments. The Dow Jones Industrial Average sold off 1.6%, while the S&P 500 declined 2.5%. The tech-heavy Nasdaq composite plunged 3.4%.
Wednesday's The Big Picture cautioned, "As seen in the accompanying Market Pulse, the actual number of distribution days, or bouts of pronounced selling, remains low. But at 10,524, the Nasdaq effectively gutted all of its mild gains since a follow-through day took place on Oct. 21."
Third Quarter Earnings Disappoint
Roku shares plummeted 15% despite beating top and bottom-line estimates in Thursday's stock market. The streaming hardware platform warned of a "rough" fourth quarter, lowering revenue forecasts to $800 million, from $894 million prior guidance.
Wireless-chip giant Qualcomm matched earnings estimates in its fiscal fourth quarter on slightly higher than expected revenue. But it lowered its outlook for the current quarter on weakening smartphone sales. QCOM stock fell nearly 9%.
Moderna trimmed an 8% loss to around 2.5%, dragging down shares of other Covid vaccine makers, after slashing its full-year outlook on continued supply challenges.
For the year, the biotech expects $18 billion to $19 billion in revenue, down from the $21 billion forecast just three months ago. Moderna says short-term supply constraints have pushed out some deliveries into 2023.
Regeneron Pharmaceuticals reported adjusted earnings of $11.14 per share on $2.94 billion in third-quarter sales. In response, REGN stock fell nearly 2%.
On average, analysts polled by FactSet expected Regeneron to earn $9.74 per share on $2.91 billion in sales. Excluding the impact of its Covid treatment, sales actually increased 11%, according to a news release.
Albemarle topped Q3 earnings estimates after the close on Wednesday but sales missed. The company also gave muted guidance. However, quarterly weakness was focused on bromide, not lithium, amid soft end markets including electronics and construction. After opening down 5%, ALB stock jumped and was up more than 3% by midday.
Cigna and ConocoPhillips were among the few earnings bright spots on Thursday. Cigna gained 1.5% after beating forecasts. Cigna is trying to build a new base after it cleared the buy zone from a buy point of 273.67 last summer.
Conoco also beat earnings, pushing its stock more than 5% higher. COP shares are extended past a 115.57 entry off a cup with handle.
The Innovator IBD 50 ETF rose 0.5%, led by medical staffing firm Cross Country Healthcare.
Among Dow Jones stocks, Apple shares fell 3.7% and Microsoft lost 1.7%.
Tesla shares rose 1.1%.
Follow Michael Molinski on Twitter @IMmolinski
