Stocks Mixed in Subdued Session…..
U.S. equities finished mixed and near the flatline, as investors sifted through a slew of data and headlines. The closure of the highly contentious Presidential election process appeared to add to some of the positive sentiment, while the Information Technology sector continued to rally. The earnings front was headlined by Dow member Travelers Companies topping forecasts, while United Airlines posted a sizeable loss and Union Pacific fell despite relatively positive results. In economic news, housing construction activity jumping to close out Q4, regional manufacturing output surprisingly surged, and jobless claims decelerated unexpectedly but remained uncomfortably high. Treasuries were lower, lifting yields, and pressure on the U.S. dollar returned, while gold and crude oil prices were slightly lower. Europe finished lower in choppy action on the heels of the European Central Bank holding its highly accommodative policy stance steady, while markets in Asia finished mixed as the Bank of Japan left its monetary policy unchanged.
The Dow Jones Industrial Average lost 12 points to 31,176, the S&P 500 Index inched 1 point higher to 3,853, and the Nasdaq Composite increased 74 points (0.6%) to 13,531. In moderate volume, 890 million shares were traded on the NYSE and 7.1 billion shares changed hands on the Nasdaq. WTI crude oil nudged $0.18 lower to $53.13 per barrel. Elsewhere, the Bloomberg gold spot price ticked $0.30 lower to $1,871.54 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was down 0.4% at 90.09.
Jobless claims slow, housing construction activity strong, regional manufacturing jumps…..
Weekly initial jobless claims came in at a level of 900,000 for the week ended January 16, below the Bloomberg consensus estimate of 935,000, and compared to the prior week’s downwardly revised 926,000 level. The four-week moving average rose by 23,500 to 848,000, and continuing claims for the week ended January 9 fell by 127,000 to 5,054,000, south of estimates of 5,300,000. The four-week moving average of continuing claims declined by 67,000 to 5,126,250.
Housing starts for December rose 5.8% month-over-month (m/m) to an annual pace of 1,669,000 units—the fastest pace since late 2006—and well above forecasts of 1,560,000 units, and compared to November’s upwardly revised pace of 1,578,000 units. Also, building permits, one of the leading indicators tracked by the Conference Board as it is a gauge of future construction, grew 4.5% m/m at an annual rate of 1,709,000, north of expectations of 1,608,000 units, and compared to the unrevised 1,639,000 unit pace in November. The stronger-than-expected housing construction came as housing starts and building permits for single-family structures—which make up the largest portion of activity—rose solidly to more than offset some weakness in multi-unit construction.
The Philly Fed Manufacturing Index unexpectedly jumped further into expansion territory (a reading above zero) for January, rising to 26.5 versus estimates to tick higher to 11.8 from December’s 11.1 level. Growth in new orders, shipments and employment all accelerated sharply.
Treasuries were lower with the rate on the 2-year note little changed at 0.13%, while the yield on the 10-year note gained 1 basis point (bp) to 1.10% and the 30-year bond rate rose 2 bps to 1.86%.
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