The stock market closed near lows of the day Thursday, after a heavy session in which investors looked for any bright spot to cling onto. There was some relief after St. Louis Fed President James Bullard said "we are getting closer" to an appropriate interest-rate setting, but that faded into the closing bell.
The sell-off followed stronger-than-expected payroll and jobless claims numbers reported in the premarket. This raised concerns the Fed will continue interest rate hikes, increasing the threat of a recession.
In an afternoon address Bullard said that inflation signs are returning to relatively low levels and that 2023 may be characterized by disinflation.
The S&P 500 retreated 1.2% while the Nasdaq was hit the hardest, down 1.5%. The Dow Jones Industrial Average gave up 1% and Russell 2000 shed 1.1%. Volume for the NYSE and Nasdaq was lower vs. the same time on Wednesday.
The tech-heavy Nasdaq 100-tracking Invesco QQQ trust ETF lost 1.6%.
Crude oil regained 1.4% to $73.85 per barrel. The Energy Select Sector SPDR ETF rose 1.8%. Natural gas continues to slide, down 9.9%, and is trading at $3 per million British thermal units.
Bitcoin futures inched up 0.4% to $16,850. The 10-year Treasury note yield added 3 basis points to 3.71%.
European stock markets were mixed, with the German DAX down 0.4% and the Paris CAC 40 shedding 0.2%. The London FTSE 100 added 0.6% to close out the trading day.
Odds for a 25-basis-point hike by the U.S. Federal Reserve at the February meeting stand at 60.2%. That would take the fed funds rate to the 4.5%-4.75% range. Meanwhile, 39.8% of market watchers are looking for a 50-basis-point hike, according to the CME Group FedWatch Tool.
Stock Market Today: Jobs Data Reveals Continued Strength
December ADP jobs data beat expectations for 145,000 jobs by a country mile, reporting 235,000 additions. The reading shows strength over November's 127,000 new jobs.
Initial jobless claims for the week ending Dec. 31 fell to 204,000, less than the 225,000 consensus, and below the prior week's 225,000.
The stock market didn't take the news well because the readings show a continued strong labor market. This indicates the Fed may continue rate hikes for longer than expected to cool things down.
Next up, investors will be watching the December jobs reports on Friday at 8:30 a.m. ET for additional insight into the labor market. December estimates are for an increase of 200,000 non-farm payroll additions, significantly lower than November's 263,000 rise. The unemployment rate is expected to remain at 3.7%.
Futures: Market Faces Big Test With Jobs Report; Tesla Cuts China Prices
Solar Stock Down Nine In A Row
Solar energy and battery producer Enphase Energy dropped another 4.5% in Thursday's stock market, marking the ninth day in a row of lower prices. It has lost over 23% during the period, the longest losing streak since January 2016.
Solar stocks have fallen out of favor since mid-December, with the energy-solar industry group dropping from the second-highest ranking IBD industry group to the 46th spot.
In other stock market news, hardware storage giant Western Digital popped 6.6%. The company is back in merger talks with fellow data storage company, Japan-based Kioxia.
Chinese e-commerce platform Pinduoduo led the IBD 50, up 4.8%, as Chinese stocks saw another day of strength. Shares are extended from the 20% to 25% profit zone of a choppy base with buy point of 73.12.
Bed Bath & Beyond plummeted 29.9% to a 30-year low in Thursday's stock market after noting it may seek bankruptcy. The retailer forecast a larger-than-expected $385.8 million net loss for the fiscal Q3 quarter, which was greater than the $276.4 million net loss in the prior year.
The distressed home retailer is exploring options including bankruptcy and says it has "substantial doubt" of it continuing as a going concern. Shares of the former meme stock now trade under $2 per share.
Regional crypto-related bank Silvergate tumbled 42.7% in heavy volume after the bank had to sell over $8 billion in assets to cover customer withdrawals. The company also announced layoffs of around 40% of its workforce, about 200 employees.
Amazon fell 2.4% after announcing over 18,000 layoffs, higher than the 10,000 it mentioned in November. The e-commerce and media giant says it hired too many workers during the pandemic. Amazon employs over 1.5 million people. The stock is about 51% off its 52-week high.
Stock Market: Beverage Stock Plummets On Earnings
The Innovator IBD 50 ETF held up better than the major stock market indexes, edging down 0.2%.
The Dow's biggest loser on Thursday, Walgreens Boots Alliance, gapped down 6.1% despite better-than-expected fiscal Q1 2023 EPS and sales. It also raised full-year 2023 sales guidance. The pharmacy retailer stock is about 36% off its 52-week high, and well below its 21-day exponential moving average.
Alcoholic beverage producer Constellation Brands sold off 9.7% after reporting mixed fiscal Q3 2023 results. The company reported worse-than-expected EPS but beat sales expectations.
