Stocks Lose Steam to Finish Lower…..

After spending most of the day in positive territory, U.S. equities slipped in late-day action to finish lower amid what continues to be a choppy week. The markets also focused on further progress on the COVID-19 vaccine front as Dow member Johnson & Johnson announced positive trial results of its one-shot candidate, while Q4 earnings season is set to unofficially kick off with key banking results tomorrow. The drama in Washington was also front-and-center, as President-elect Joe Biden is expected to deliver details on further fiscal relief tonight, and the House impeached President Donald Trump for a second time yesterday. The markets also eyed comments from Fed Chief Jerome Powell in an economics webinar today, at which the Chairman offered no surprises, and affirmed his commitment to lower rates for the foreseeable future. On the economic front, initial jobless claims rose much more than expected and import prices came in a bit hotter than anticipated. In other equity news, Delta Air Lines posted a larger-than-expected adjusted loss but offered relatively upbeat commentary on 2021. Treasuries declined, lifting yields, and the U.S. dollar ticked to the downside, but remained near multi-year lows, while gold gained modest ground and crude oil prices were higher to add to a recent rally. Markets in Europe and Asia were mixed.

The Dow Jones Industrial Average fell 69 points (0.2%) to 30,992, the S&P 500 Index was down 14 points (0.4%) to 3,796, and the Nasdaq Composite decreased 16 points (0.1%) to 13,113. In heavy volume, 1.0 billion shares were traded on the NYSE and 6.6 billion shares changed hands on the Nasdaq. WTI crude oil rose $0.66 to $53.57 per barrel. Elsewhere, the Bloomberg gold spot price was up $1.78 at $1,847.29 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—fell 0.2% to 90.18.

Jobless claims accelerate more than expected, import price inflation hotter than anticipated…..

Weekly initial jobless claims came in at a level of 965,000 for the week ended January 9, well above the Bloomberg consensus estimate of 789,000, and compared to the prior week’s downwardly-revised 784,000 level. The four-week moving average rose by 18,250 to 834,250, and continuing claims for the week ended January 2 increased by 199,000 to 5,271,000, north of estimates of 5,000,000. However, the four-week moving average of continuing claims decreased by 59,000 to 5,215,750.

The Import Price Index rose 0.9% month-over-month (m/m) for December, versus expectations of a 0.7% gain, and compared to November’s upwardly-revised 0.2% increase. Versus last year, prices were down by 0.3%, compared to forecasts of a 0.8% decrease and compared to November’s unadjusted 1.0% fall.

Treasuries were lower, adding to a recent drop that has boosted yields, as the rate on the 2-year was up 1 basis point (bp) at 0.15%, the yield on the 10-year note gained 4 bps to 1.13% and the 30-year bond rate increased 5 bps to 1.87%.

Federal Reserve Chairman Jerome Powell took part in a Princeton economics webinar today. Powell offer no surprises, while affirming his commitment to keep interest rates low for the foreseeable future, even amid his hopes of a strong economic recovery. Powell said, “When the time comes to raise interest rates, we’ll certainly do that, and that time, by the way, is no time soon.”

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