The stock market cut its rebound in half in afternoon trading Thursday as a top Fed official doused hopes for an interest-rate cut as early as March.
The Nasdaq composite, which had been up more than 1%, was up only 0.6%. Technology Select Sector SPDR still led sectors with a 1.3% increase. The Nasdaq 100 rose 0.7% but is no longer on track for a record closing high.
Apple jumped 2.7% after rising from support at its 200-day moving average. BofA Securities upgraded the stock to buy from neutral and raised the price target to 225 from 208. Analyst Wamsi Mohan cited a potential sales boom from the company's upcoming Vision Pro headset.
The S&P 500 trimmed its gain to 0.2% in the stock market today. It made a stand at the 21-day exponential moving average.
The Dow Jones Industrial Average lost about 85 points, or 0.2%, as UnitedHealth Group alone subtracted more than 100 points off the index. The managed care firm fell nearly 3% in sympathy with rival Humana, which plunged 10% after it slashed its full-year earnings outlook.
But Boeing rose 3.2% after it announced that India-based Akasa Air ordered 150 of its 737 Max jetliners. The deal is a shot in the arm for Boeing, which had fallen 22% this month after its 737 Max 9 jets were grounded for safety inspections.
The Russell 2000 reversed lower 0.4% as small caps continue to languish. The index is down nearly 6% so far this month.
Market Cools On Fed Comments
Indexes came off their midday highs and appeared to drop after Atlanta Fed President Raphael Bostic gave comments on monetary policy. Bostic said the economic environment is unpredictable, and it's too early to think of rate cuts.
"Premature rate cuts could unleash a surge in demand that could initiate upward pressure on prices," Bostic said. Still, he feels confident enough that he now expects rate cuts to start in the third quarter, closer than his earlier expectation for the fourth quarter.
The Fed meets next on Jan. 30-31, although most traders are eyeing the March meeting for a possible interest-rate cut.
The Innovator IBD 50 ETF also reversed lower, to a 0.3% loss.
Volume rose on the Nasdaq and fell on the New York Stock Exchange compared with the same time on Wednesday. Despite index gains, decliners topped advancers by 7-5 on the Nasdaq and by 7-4 on the NYSE.
Chips Lead Stock Market
Taiwan Semiconductor Manufacturing gapped past the 105.52 buy point of a cup-with-handle base in huge volume, the catalyst for the sector's strength.
Early Thursday, TSMC beat fourth-quarter earnings expectations as a higher forecast for the year fueled optimism for the chip industry. The chipmaker — a major supplier to Apple, Nvidia and other big techs — forecast 2024 revenue to climb more than 20%. TSMC also cited strong demand for high-end chips used in artificial intelligence applications.
The VanEck Semiconductor ETF jumped 2% to an all-time high. Marvell Technology broke out above a 67.99 buy point from a long cup base.
Elastic tried to break out past a 118.24 buy point from a flat base but it too reversed lower. The company's Elasticsearch helps collect, manage and analyze data needed to create generative AI systems.
The 10-year Treasury yield rose 4 basis points to 4.15% after job data and Bostic's comments.
Claims for jobless benefits fell to 187,000, the lowest level in 16 months. It was below both the forecast from economists for 206,000 and the previous week's 203,000 claims.
Housing starts fell to 1.460 million annual rate in December. But building permits, which serve to forecast future construction, rose to 1.495 million. Both reports were above economists' estimates, according to Econoday. The iShares U.S. Home Construction ETF pared gains to 0.1%.
Stock Market Gets Earnings Reports
Birkenstock sold off 10% in heavy volume, on pace for its largest single-day loss since the company's initial public offering on Oct. 11, according to Dow Jones Market Data. In the footwear maker's first quarterly results since the IPO, profit missed expectations and the outlook was deemed cautious.
Birkenstock had climbed more than 20% from a 42.96 alternate buy point but has given back most of that gain. That creates a sell situation.
Elsewhere, financials were mixed after earnings reports.
KeyCorp sold off more than 5% and dipped below the 50-day moving average. The bank missed fourth-quarter profit estimates, according to FactSet.
Discover Financial Services slid 11% in heavy volume. The credit card company missed fourth-quarter profit expectations and said it is raising reserves for credit losses.
M&T Bank was little changed despite a mixed fourth-quarter report. Shares are below a 134.92 entry of a December breakout. Also, First Horizon climbed 4% after it beat profit expectations. Further, Truist Financial reversed slightly lower. FirstCall data showed the company missed profit views.
Fuel-cell company Plug Power skidded 15.5% to the lowest since September 2019 after it announced it will sell up to $1 billion in stock to raise more capital. Down 47% so far this month, it also was one of the worst-performing stocks in the stock market Thursday.
