Stocks ended in decline on Thursday, with bond yields resuming their high and gains from retail giant Walmart (WMT) – Get report disappointed.
Stocks also fell after a Labor Department report that said weekly unemployment claims in the U.S. have increased more than expected. Unemployment insurance claims rose to 861,000, the highest reading in a month.
The 10-year Treasury yield rose to 1.318%, close to its highest level in a year. The rise in yields raised concerns about higher inflation and fears that rising borrowing costs could lead to a retraction in the stock market.
The Dow Jones Industrial Average fell 119 points, or 0.38%, to 31,493 and the S&P 500 fell 0.44%. Walmart (WMT) – Get report and Boeing (BA) – Get report led to a decline in the Dow industrial index.
The Nasdaq, large in technology, fell 0.72%, as companies related to technology may be more vulnerable to inflationary pressures.
Walmart shares fell 6.4% after the world’s largest retailer reported weaker-than-expected fourth-quarter earnings on sales of more than $ 150 billion.
Walmart also said it expects sales in fiscal year 2022 to increase by just a single-digit percentage, with operating revenue and profits either stable or slightly above.
Walmart promised to raise average employee wages to $ 15 an hour and increase total capital expenditures to $ 14 billion.
In the meantime, the Federal Reserve said in minutes from its late January meeting that the coronavirus pandemic still poses “considerable risks” to the economy and that “the policy stance must remain accommodative until these goals are achieved”.
The Fed added that it will take “some time” before conditions allow it to start reducing its $ 120 billion bond purchase a month.
The minutes also showed that Fed officials were not terribly concerned by the recent inflationary pressures. Fed Chairman Jerome Powell warned that inflation may increase, but only temporarily, with the economy reopening.
Energy prices rose again on Thursday, with Brent crude trading at around $ 64 a barrel, as a deep freeze in Texas removed nearly 40% of U.S. oil production, according to Bloomberg.
The Dow Jones index recorded a record close for the second day of mixed trading on Wednesday, with US retail sales and producer prices rising in January and bond yields trading at their highest levels in a year.
GameStop (GME) – Get report ended in an 11% drop as the Chamber’s Financial Services Committee held an audience focused on the recent commercial frenzy surrounding the video game retailer’s shares and other heavily shorted stocks.
GameStop Hearings expectations by Jim Cramer about real money
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