U.S. Stocks Finish Extremely Volatile Session Mostly Lower

Stocks went on another wild ride over the course of the trading day on Thursday, extending the volatility seen in recent sessions. After recovering from an early sell-off, the major averages pulled back once again to end the day in negative territory.

The major averages moved back to the upside going into the close but finished the session in the red. While the Dow edged down 7.51 points or less than a tenth of a percent to 33,546.32, the Nasdaq fell 38.70 points or 0.4 percent to 11,144.96 and the S&P 500 dipped 12.23 points or 0.3 percent to 3,946.56.

The volatility on the day came as traders assessed the impact of recent developments on the likelihood of Chine easing Covid restrictions and the outlook for interest rates.

A recent jump in Covid cases in China has seemingly dashed hopes that the country will soon begin easing restrictions, leading to renewed concerns about global demand.

Hawkish comments from Federal Reserve officials also dented recent optimism about the outlook for interest rates.

In remarks at an event hosted by Greater Louisville Inc., St. Louis Fed President James Bullard suggested the central bank’s aggressive interest rate hikes have had “only limited effects on observed inflation.”

Bullard said the Fed will need to continue increasing interest rates to reach a level that could be considered “sufficiently restrictive.”

Selling pressure waned over the course of the session, however, as the Fed is still expected to slow the pace of its rate hikes as early as next month.

Sector News

Gold stock showed a significant move to the downside on the day, dragging the NYSE Arca Gold Bugs Index down by 2.0 percent.

The weakness among gold stocks came amid a decrease by the price of the precious metal, with gold for December delivery falling $12.80 to $1,763 an ounce.

Considerable weakness was also visible among utilities stocks, as reflected by the 1.9 percent drop by the Dow Jones Utility Average.

Housing stocks also saw notable weakness following the release of a Commerce Department showing a notable decrease in housing starts in the month of October.

Banking, retail and transportation stocks also moved to the downside on the day, while rebounds by computer hardware and semiconductor stocks contributed to the recovery attempt by the broader markets.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan’s Nikkei 225 Index fell by 0.4 percent, while Hong Kong’s Hang Seng Index slumped by 1.2 percent.

Meanwhile, the major European markets turned mixed over the course of the session. While the German DAX Index inched up by 0.2 percent, the U.K.’s FTSE 100 Index edged down by 0.1 percent and the French CAC 40 Index slid by 0.5 percent.

In the bond market, treasuries showed a notable pullback after moving sharply higher over the past few sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 8.3 basis points to 3.775 percent.

Looking Ahead

Trading on Friday may be impacted by reaction to reports on existing home sales and leading economic indicators, although activity may be somewhat subdued following recent volatility.

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