Wall Street stocks traded cautiously on Thursday, ending a rally from the previous session, as fresh weak US economic data revived concerns about the pace of inflation in the US.
The benchmark S&P 500 on Wall Street rose 0.1 percent in the first hour of trading while the heavy Nasdaq Composite Index added 0.4 percent.
The gains were muted after data from the US Labor Department showed that new jobless claims fell to 242,000 last week, from 264,000 in the previous seven days.
The number fell below analysts’ expectations, raising concerns that a tight labor market will make it difficult for the Federal Reserve to bring inflation levels back on target.
At the same time, corporate results painted a mixed picture for consumer spending. Wal-Mart shares rose 2.3 percent after the world’s largest retailer reported stronger-than-expected earnings and raised its full-year forecast for sales growth.
The company was the oddest outlier among rivals Home Depot and Target, which painted a much bleaker picture of discretionary spending in the United States earlier in the week.
The KBW index of regional banks lost 0.3 percent on Thursday, ending its rally from the previous session when lender Western Alliance reported earlier in the week that its deposits grew by $2 billion in the second quarter.
The yield on the two-year rate-sensitive Treasury note rose 0.07 percentage point to 4.22 percent. The yield on the benchmark 10-year note rose 0.06 percentage point, at 3.64 percent. Bond yields rise when prices fall.
The dollar index, which tracks the currency against a basket of six peers, rose 0.5 percent.
“The strength of the dollar (..) suggests that foreign exchange markets seem to lag behind the cautious optimism seen in other asset classes such as equities,” said Francesco Pesol, currency analyst at ING.
Brent crude fell 0.8 percent to $76.34 a barrel, while West Texas Intermediate crude equivalent to the United States fell 0.6 percent to $72.32 a barrel.
The day before, Wall Street stocks jumped on the announcement that US Democrats and Republicans are close to a budget agreement that would avoid a default on US debt.
In Europe, the region-wide Stoxx 600 index rose 0.2 percent, recovering from two consecutive days of decline. France’s CAC 40 rose 0.4 percent. While the German DAX index rose 1.1 per cent.
Asian stocks also rose, driven by momentum from Wall Street. Hong Kong’s Hang Seng rose 0.9 percent and Japan’s Topix rose 1.1 percent.
China’s CSI 300 was the nosedive, down 0.1 percent, extending losses from earlier in the week when official data indicated the country’s post-pandemic recovery was slowing.
