Indexes were erratic after comments from Fed Chair Jerome Powell left investors unsure about rate policy. But the stock market was generally higher in afternoon trading.
The Nasdaq composite, S&P 500 and Dow Jones Industrial Average reversed course and moved higher by 0.3% to 0.4% as the Fed chief's words were absorbed by investors. Volume rose on the New York Stock Exchange and Nasdaq compared with the same time on Wednesday.
The Innovator IBD 50 exchange traded fund lagged with a 0.5% decline. The ETF also has met resistance at the 50-day line. Small caps also lagged, with the Russell 2000 index off 0.2%.
Speaking at the Economic Club of New York, Powell said he is encouraged by the slowing trend in inflation and the Fed will "proceed carefully" with monetary policy.
"In any case, inflation is still too high, and a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal," Powell said. "We cannot yet know how long these lower readings will persist, or where inflation will settle over coming quarters."
He added that the Fed is attentive to the resilience of economic growth and the job market. If those trends continue, more rate hikes cannot be ruled out. Powell also said the Fed is paying attention to rising longer-term yields.
Stock Market Watches Data, Too
Treasury yields rose after Powell's speech. The 10-year yield was up 5 basis point to 4.96%. Earlier Thursday, the yield was up at 4.97%. The benchmark yield is on track for a fourth-straight advance after rising to its highest level since July 2007 on Wednesday.
Cboe's FedWatch showed most traders believe there won't be a rate change in the November Fed meeting. There's a 30% chance of a quarter-point hike in the December meeting, down from 37% on Wednesday.
Jobless claims last week fell by 13,000 to 198,000, the Labor Department reported earlier Thursday. That was below economist expectations of 211,000 and reflected a job market that has yet to cool off significantly.
But the Index of Leading Economic Indicators grew worse in September with a -0.7% reading from -0.5% the previous month. Economists had expected -0.4%.
Existing home sales fell 2% from the previous month to 3.96 million units. That's the fourth straight month of declines and the lowest level since 2010, said BMO Capital Markets economist Jay Hawkins.
"There's no relief in sight for the battered U.S. housing market absent a sharp drop in mortgage rates — the 30-year fixed rate averaged 7.20% in September, the highest in over two decades," he said.
On a year-over-year basis, sales fell 15.4%, the National Association of Realtors said.
Tesla, Netflix Earnings
Tesla sold off nearly 9% on the stock market after the electric-vehicle company missed third-quarter profit and sales expectations. Chief Executive Elon Musk also tempered expectations about the company's planned Cybertruck, saying the pickup truck program faces "enormous challenges."
Tesla stock is forming a cup-with-handle base, but the handle is now an excessive 20% in depth. Shares also are trading below their 50-day moving average and are near the 200-day line.
Netflix jumped nearly 16% and is trying to cross above its 50-day moving average. The video streaming service beat profit expectations late Wednesday for the third quarter, which also saw a surprisingly strong jump in subscribers.
Netflix is on track for its best day since Jan. 20, 2021, when it rose nearly 17%, according to Dow Jones Market Data. The stock hasn't quite formed a proper base thus far.
Taiwan Semiconductor rallied 5.5% and climbed back above the 200-day moving average in heavy trading. The chipmaker beat earnings estimates and gave a current-quarter forecast that was above analyst estimates. The stock could be forming a new base.
AT&T jumped 8% to a one-month high after the company beat earnings and revenue expectations and its wireless subscriber additions topped estimates.
Health Care Among Stock Market Losers
Eli Lilly fell 2% in heavy trading as health care stocks fell broadly but trimmed losses in afternoon trading. Health Care Select Sector SPDR reduced its drop from more than 1% to 0.2%.
Since September, selling has been especially heavy in drug stocks. SPDR S&P Pharmaceuticals ETF is down 16% from its Aug. 31 high.
Switzerland-based Roche sold off after the drugmaker cited declining demand for Covid products in its third-quarter results.
Blackstone gapped down to a loss of 6%. With a loss of more than 10% from its 108.77 buy point, the stock has made a sell signal. It's also falling deeper below the 50-day line. The world's largest alternative asset management firm earlier Thursday missed third-quarter profit and revenue expectations, according to FactSet.
