- Cisco falls by reducing its annual forecasts
- Walmart abandons caution on consumer spending
- Weekly unemployment claims higher than expected
- Indices: Dow down 0.13%, S&P up 0.12%, Nasdaq up 0.07%
Nov 16 (Reuters) – The S&P 500 and Nasdaq managed to eke out tiny gains on Thursday, while the Dow Industrial Average (.DJI) finished slightly lower under pressure from tech and retail leaders , Cisco and Walmart, after disappointing forecasts.
Shares of Cisco Systems (CSCO.O) fell 9.8% as the communications and networking technology company cut its full-year revenue and profit forecast due to a slowdown in demand for its network equipment. Also in technology, shares of Palo Alto Networks (PANW.O) fell 5.4% after its guidance late Wednesday for second-quarter billings fell short of expectations.
Shares of Walmart (WMT.N) fell 8.1% daily after hitting a record high. The retail giant said U.S. consumers were spending cautiously due to inflation, even as it raised its annual sales and profit forecasts.
That helped push the S&P 500 Consumer Staples Index (.SPLRCS) down 1.2% and weighed on retailers Dollar General (DG.N) and Dollar Tree
Additionally, Target (TGT.N) fell 0.4%, giving up some gains from the previous session in which it climbed 17.8% after providing a strong bullish outlook for the holiday quarter .
Earlier this week, Wall Street indexes rebounded sharply with data signaling a cooling in U.S. inflation and fueling hopes that the U.S. Federal Reserve is done raising interest rates. Additionally, this week’s passage of a stopgap bill aimed at averting a government shutdown has eased some nerves.
Given that Cisco and Walmart are “the backbones of their respective industries,” Paul Nolte, senior wealth advisor and market strategist at Murphy & Sylvest, said their weakness “calls into question the health of the consumer and perhaps that of technology. sector.”
But others noted positive counterforces in Thursday’s session, with gains in mega-caps including Microsoft Corp (MSFT.O), Apple Inc (AAPL.O) and Nvidia (NVDA.O).
“The major indices are pretty flat on the day, but we’re still seeing a lot of strength in the tech or large-cap growth sectors. This is simply a continuation of the positive narrative we’ve seen in the market recently ” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
Specifically, Ghriskey cited investor relief as the Federal Reserve appears to be done with its rate-hiking cycle.
Earlier, a report from the Labor Department showed that weekly jobless claims rose more than expected, strengthening bets that the Fed would not need to raise rates further.
The Dow Jones Industrial Average (.DJI) fell 45.74 points, or 0.13%, to 34,945.47, the S&P 500 (.SPX) gained 5.36 points, or 0.12%, to 4,508.24 and the Nasdaq Composite (.IXIC) added 9.84 points, or 0.07%, to 14,113.67.
Energy (.SPNY), down 2.1%, led the declines among the S&P’s 11 major sectors, hitting a four-month low as crude prices stabilized nearly 5%. . Communication Services (.SPLRCL), up 0.9%, was the sector with the biggest gain during the session, followed by Information Technology (.SPLRCT), up 0.7 %.
“The main driver today is the tug of war between those who want to sell on a rally and those who want to buy on a dip,” said Brian Jacobsen, chief economist at Annex Wealth Management.
“The economic data hasn’t been bad enough to trigger too many recession fears, but it hasn’t been good enough to generate too much enthusiasm. We’re entering a period with the holidays where small surprises can have a disproportionate influence on prices.”
Money markets have fully priced in the likelihood that the Fed will hold rates steady in December and see about a 62% chance of seeing a rate cut of at least 25 basis points in May, according to the group’s FedWatch tool. CME.
Among individual stocks, shares of Macy’s (MN) rose 5.7% after the department store operator’s quarterly sales topped analyst estimates.
Declining issues outnumbered advancing ones on the NYSE by a ratio of 1.42 to 1; on the Nasdaq, a ratio of 1.97 to 1 favored the declines.
The S&P 500 posted 15 new 52-week highs and 2 new lows; The Nasdaq Composite recorded 40 new highs and 123 new lows.
On American stock exchanges, 10.71 billion shares changed hands, compared to 11.09 billion on average for the last 20 sessions.
Reporting by Sinéad Carew, Caroline Valetkevitch in New York, Shristi Achar A and Amruta Khandekar in Bangalore; Editing by Maju Samuel, Pooja Desai and David Gregorio
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