Stocks pull back as market tries to recover from previous sell-off

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U.S. stocks retreated from session highs on Thursday but remained firmly in the green, extending a choppy trading streak as markets attempt to recover from a sharp selloff earlier in the week.

The S&P 500 rose 0.8%, paring some gains after jumping more than 1% at the open, while the Dow Jones Industrial Average rose 0.6%. The tech-heavy Nasdaq Composite also returned 0.8% above balance after climbing as much as 2% in previous trading on a boost from Facebook parent company Meta (FB ), which reported stronger-than-expected earnings after Wednesday’s close. sent higher actions.

Investors assessed new data from Washington DC that showed U.S. economic activity unexpectedly contracted in early 2022 for the first time in nearly two years, as lingering supply chain imbalances , inflationary pressures and the war in Eastern Europe weighed on growth. US gross domestic product (GDP) in the first quarter fell at an annualized rate of 1.4% after a growth pace of 6.9% at the end of 2021.

“The latest snapshots of economic data remind us of the volatile and complicated times we live in,” Bankrate senior economic analyst Mark Hamrick said in an emailed note.

With just three trading days left in April, the typically bullish month is poised for its worst performance since recording a 9.0% decline in 1970, according to data from LPL Financial Research.

“The usual suspects of a slowing economy, a hawkish Federal Reserve Bank, supply chain worries, war in Europe and now another China shutdown have all combined. to make it one of the worst starts to a year for stocks and bonds,” Ryan Detrick, LPL’s chief financial markets strategist, said in a comment on Tuesday.

Investors are in the throes of a lackluster earnings season, with 180 companies on the schedule this week for quarterly reports. Additionally, traders are digesting mixed results from large-cap tech giants: Apple (AAPL) and Amazon (AMZN) set to top Big Tech earnings after Thursday’s closing bell on the back of numbers from Microsoft (MSFT) , Alphabet (GOOGL) and Meta (FB) in recent days. Tech giants make up 22.2% of the S&P 500 market capitalization.

Shares of Meta Platforms rose about 17% in early trading Thursday after the company reported first-quarter daily active users that beat expectations after Wednesday’s market close. Last quarter, Facebook lost $230 billion in market value, marking the worst one-day wipeout in history for a U.S. company after the social media giant reported a drop in profits attributed in part to a decline US users on its flagship platform and the competition. from TikTok.

“The bar was very low for Facebook, and this report should break it,” Vital Knowledge analysts said in a note after the earnings release.

Elsewhere in the markets, investors continue to face headwinds from Russia’s invasion of Ukraine, lingering supply chain and inflationary pressures, and a further rise in interest rates as soon as the next week when the Federal Reserve meets for its next policy on May 4. Added to these cross-currents are new concerns about an ongoing resurgence of COVID-19 in key parts of China that threatens to exacerbate the global economic outlook.

LPL Financial, however, stressed that double-digit declines in a year are normal.

“After a single 5% pullback all of last year, markets have provided a hostile reminder in 2022,” Detrick said in his Tuesday note, adding that since 1980 the average correction each year is 14.0%. , putting this year’s 13.0% correction into perspective.

He also pointed out that in the 21 times since 1980 that the S&P 500 has seen double-digit declines from its peak, the index has managed to come back and end the year positive in 12 of those years.

12:10 p.m. ET: Stocks drop from session highs ahead of more tech earnings

Here’s where the shares were at noon Thursday:

  • S&P 500 (^GSPC): +32.90 (+0.79%) to 4,216.86

  • Dow (^ DJI): +147.32 (+0.44%) to 33,449.25

  • Nasdaq (^IXIC): +76.46 (+0.61%) at 12,565.40

  • Raw (CL=F): +$1.90 (+1.86%) at $103.92 per barrel

  • Gold (CG=F): -$2.00 (-0.11%) at $1,886.70 per ounce

  • 10-year cash flow (^TNX): +5.1 bps for a yield of 2.8690%

9:30 a.m. ET: Stocks jump as markets try to recover from the sell-off

Here are the top moves in the markets as of 9:30 a.m. ET:

  • S&P 500 (^GSPC): +54.92 (+1.31%) to 4,238.88

  • Dow (^ DJI): +200.09 (+0.60%) to 33,502.02

  • Nasdaq (^IXIC): +227.07 (+1.82%) at 12,716.00

  • Raw (CL=F): -0.15$ (-0.15%) at 101.87$ per barrel

  • Gold (CG=F): -$2.10 (-0.11%) at $1,886.60 per ounce

  • 10-year cash flow (^TNX): +5.9 bps for a yield of 2.8770%

9:02 a.m. ET: Another 180,000 Americans filed new unemployment claims last week

Jobless claims fell again in the latest weekly data, holding near their lowest levels since the 1960s as a strong labor market and improving unemployment levels remain a bright spot in the economy. American.

The Ministry of Labor latest weekly report on unemployment insurance claims showed that 180,000 claims were filed in the week ended April 23, lower than the 184,000 economists polled by Bloomberg had expected.

Initial jobless claims remained below 200,000 for a 10th consecutive week.

Given the spike and then drop in unemployment insurance claims, the Labor Department has also reconfigured how it adjusts weekly data to account for seasonal factors. Beginning last week, the Labor Department resumed using “multiplicative” seasonal adjustment factors for the data. For much of the pandemic, the department has used “additive” seasonal adjustments that help smooth out large swings in weekly numbers.

“As measured by a proxy for layoffs, the labor market appears to be holding up well,” Bankrate senior economics analyst Mark Hamrick said in an emailed note. “Seasonally adjusted new jobless claims were down from the previous week at 180,000. This is slightly above the 50-plus-year low of 166,000 last month.”

8:55 am ET: US GDP unexpectedly contracted at an annualized rate of 1.4% in the first quarter

U.S. economic activity unexpectedly slowed in the first three months of 2022 for the first time in nearly two years, lingering supply chain imbalances, inflationary pressures and war in Eastern Europe weighing on growth.

The Bureau of Economic Analysis (BEA) reported in a preliminary estimate that US gross domestic product (GDP) in the first quarter fell at an annualized rate of 1.4% after a 6.9% growth pace at the end of 2021. Economists polled by Bloomberg predicted a 1% increase.

The GDP report serves as a look back at economic activity, capturing the period from January to March, but the measure is an important indicator of the state of the US economy at the start of this year – especially as some strategists are predicting it more and more. the possibility of a recession in the short or medium term. A recession is usually measured by two consecutive quarters of negative GDP growth.

“In the first quarter, an increase in COVID-19 cases linked to the Omicron variant resulted in continued restrictions and disruptions to facility operations in parts of the country,” the BEA said in its report Thursday morning. “Government assistance payments in the form of repayable loans to businesses, grants to state and local governments, and social benefits to households have all declined as the provisions of several federal programs have expired or been reduced.”

7:10 a.m. ET: Nasdaq futures rise 2% on better-than-expected Meta earnings boost

Here are the main developments in futures trading before the opening bell on Thursday:

  • S&P 500 Futures Contracts (ES=F): +61.50 (+1.47%) to 4,241.75

  • Dow futures (JM=F): +277.00 (+0.83%) to 33,503.00

  • Nasdaq futures contracts (NQ=F): +268.50 (+2.06%) to 13,277.50

  • Raw (CL=F): -0.48$ (+0.47%) to 101.54$

  • Gold (CG=F): +$0.20 (+0.01%) to $1,888.90 per ounce

  • 110-year cash flow (^TNX): 0.00 bp for a yield of 2.8180%

6:14 p.m. ET Wednesday: Stock futures jump as markets try to recover from selling

Here’s where stock futures stood in post-trade trading on Wednesday night:

  • S&P 500 Futures Contracts (ES=F): +34.50 (+0.83%) to 4,214.75

  • Dow futures (JM=F): +96.00 (+0.29%) to 33,322.00

  • Nasdaq futures contracts (NQ=F): +179.25 (-1.38%) to 13,188.25

  • Raw (CL=F): +0.01$ (+0.01%) to 102.03$

  • Gold (CG=F): -$2.70 (-0.14%) at $1,886.00 per ounce

  • 110-year cash flow (^TNX): +4.6 bps for a yield of 2.8180%

NEW YORK, NEW YORK – APRIL 25: People walk at the New York Stock Exchange (NYSE) on April 25, 2022 in New York City. Shares fell Monday morning as investors continued to worry about inflation and global uncertainty over Russia’s invasion of Ukraine. (Photo by Spencer Platt/Getty Images)

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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