Wall St. ends sharply lower as jobless claims hit 18-month low



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Wall St. ends sharply lower as jobless claims hit 18-month low

On Thursday, all three key indices of Wall Street had rounded off the session lower amid an investors’ rotation to cyclicals, as US Labour Department data had revealed earlier in the day that US weekly initial jobless claims fell to an 18-month low last week, soothing worries of a slowdown in economic recovery, however, also had stoked frets that the Federal Reserve could ease its fiscal stimulus for the economy much earlier-than-anticipated.

Nonetheless, US Fed Chair Jerome Powell had said later last month that the Central Bank would gradually taper its $120 billion bond repurchase program as early as ‘this year’, if the economy could maintain its current growth momentum in job market, eventually sending shockwaves across US equity markets following US Labour Department’s initial jobless claims data.

In factuality, investors appeared to have switched gear to a flight-to-safety mode after US Labour Department data had revealed earlier in the day that the number of Americans filing for first-time state unemployment benefits fell 35,000 to a seasonally adjusted 310,000, beating an analysts’ estimate of 335,000 applications and nearing a 200,000-250,000 range what is widely contemplated as a healthful labour market.

Wall St. totters after US weekly initial claims data

Citing statistics, in the day’s Wall St. wind-down, trade-sensitive Dow faltered 0.43 per cent to 34,879.38 and benchmark S&P 500 shrugged off 0.46 per cent to 4,493.28 with Amazon and Microsoft both taking a tattering header of more than 1 per cent, however, defensives such as real estate alongside financials and commodity linked stocks gained, while tech-heavy Nasdaq was nudged 0.25 per cent lower to 15,248.25.

Meanwhile, referring to a largely rangebound US capital market with investors frequently rotating between cyclicals and growth stocks, a chief executive of Infrastructure Capital Management in New York, Jay Hatfield said, “The problem with the market these days is it’s rotating more than it’s moving.

Today, because of the job claims report, everyone is buying cyclical stocks. We see it as a rangebound market, between 4,400 and 4,600 (on the S&P 500)”.