U.S. equities finished lower for a fourth-straight session, as uncertainty surrounding any U.S./China trade deal weighed on sentiment, with a lawsuit brought on by China’s Huawei against the U.S. regarding a ban on its equipment adding to the mix. News on the equity front included some second-tier earnings results that were mixed. Treasury yields were lower amid a relatively light economic calendar that indicated a decline in initial jobless claims, slight revisions to productivity and labor costs, and an in line consumer credit report. Crude oil prices were higher and gold reversed to the downside, while the U.S. dollar gained solid ground amid a decline in the euro following the European Central Bank’s decision to keep rates unchanged, as expected, and the announcement of another round of loans for banks.
The Dow Jones Industrial Average (DJIA) fell 200 points (0.8%) to 25,473, the S&P 500 Index declined 23 points (0.8%) to 2,749, and the NASDAQ Composite tumbled 84 points (1.1%) to 7,421. In heavy volume, 920 million shares were traded on the NYSE and 2.4 billion shares changed hands on the NASDAQ. WTI crude oil rose $0.44 to $56.66 per barrel and wholesale gasoline was up $0.02 to $1.81 per gallon. Elsewhere, the Bloomberg gold spot price lost $0.96 to $1,285.44 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.8% higher at 97.66.
Weekly initial jobless claims fell by 3,000 to 223,000, versus the Bloomberg expectation calling for 225,000, with the prior week’s figure being revised higher to 226,000 from 225,000. The four-week moving average declined by 3,000 to 226,250, while continuing claims fell by 50,000 to 1,755,000, south of estimates of 1,772,000.
Final Q4 nonfarm productivity was revised to an increase of 1.9% on an annualized quarter-over-quarter (q/q) basis, versus expectations of a 1.5% gain, following the downwardly revised 1.8% increase seen in Q3. Unit labor costs were adjusted to a rise of 2.0% q/q, above the forecast calling for a 1.7% gain. Unit labor costs were revised upward to a rise of 1.6% in Q3.
Consumer credit, released in the final hour of trading, showed consumer borrowing expanded by $17.0 billion during January, matching the forecast of economists polled by Bloomberg, while December’s figure was adjusted downward to an increase of $15.4 billion from the originally reported $16.6 billion. Non-revolving debt, which includes student loans and loans for vehicles and mobile homes, rose $14.5 billion, a 5.9% increase year-over-year (y/y), while revolving debt, which includes credit cards, rose by $2.5 billion, a 2.9% y/y rise.
Treasuries were higher, as the yield on the 2-year note and the 30-year bond were down 4 basis points (bps) to 2.47% and 3.03%, respectively, while yield on the 10-year note declined 5 bps to 2.64%.
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