Wall Street Edges Lower After Seven Session Rally
U.S. stocks edged lower on Thursday after a seven-session winning streak on the S&P 500 and a jobless claims report which provided few clues into the Federal Reserve’s upcoming decisions about stimulus policy.
Initial claims for state unemployment benefits slipped 31,000 to a seasonally adjusted 292,000, the lowest level since 2006 and well below expectations of 330,000 new claims.
But the data was skewed by technical problems in claims processing because two states were upgrading their computer systems and did not process all the claims they received during the week, muddying the last major reading on the labor market before the Federal Reserve’s next meeting.
The distorted data has made it hard for investors to reach any conclusions about the labor market, said Gordon Charlop, a managing director at Rosenblatt Securities in New York.
“But the fact of the matter remains, the direction is obviously towards tapering, which is really a good thing,” Charlop said. “That indicates that it worked. The question will be how measured will (the Fed) be and you have to think they are going to err on the side of caution. They will be very measured in their approach and won’t do anything precipitous.”
The S&P 500 .SPX had risen 3.4 percent over the prior seven sessions, its longest winning streak in two months, as concerns about a Western military strike against Syria have faded and stocks have been buoyed by stronger-than-expected economic data from China.
The United States will insist Syria take rapid steps to show it is serious about abandoning its chemical arsenal, senior U.S. officials said, as Secretary of State John Kerry arrived in Geneva for talks with Russian Foreign Minister Sergei Lavrov.
U.S. export prices fell 0.5 percent in August, the sixth straight monthly decline, while import prices remained flat. Expectations were for export prices to rise 0.1 percent and import prices to climb 0.4 percent.
The Dow Jones industrial average .DJI fell 6.79 points or 0.04 percent, to 15,319.81, the S&P 500.SPX lost 2.58 points or 0.15 percent, to 1,686.55 and the Nasdaq Composite .IXIC dropped 7.754 points or 0.21 percent, to 3,717.256.
Employment is a key component of the central bank’s planning for economic stimulus, known as quantitative easing.
The Fed will hold a two-day policy meeting ending on Wednesday, when a decision is expected about whether to make changes to its current bond purchases of $85 billion a month.
Economists at a majority of U.S. primary dealers expect the Fed to announce it will cut its bond purchases, according to a recent Reuters poll.
In company news, Lululemon Athletica Inc (LULU.O) slumped 6.4 percent to $64.58 after the yogawear retailer reported second-quarter results and trimmed its outlook.
NetSol Technologies Inc (NTWK.O) jumped 13.8 percent to $11.61 after the software maker reported fourth-quarter earnings.
S&P Dow Jones Indices announced late Wednesday that Vertex Pharmaceuticals Inc (VRTX.O) and Ametek Inc (AME.N) will replace Advanced Micro Devices Inc (AMD.N) and SAIC Inc (SAI.N) in the S&P 500 after the close of trading on September 20.
Vertex shares gained 2.4 percent to $81.69 and Ametek rose 3.2 percent to $45.83. Advanced Micro fell 2.1 percent to $3.74 and SAC dropped 1.5 percent to $14.54.
Source: Reuters
