February 22, 2024

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Stock futures trade lower as jobless claims rise, Walmart disappoints

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U.S. equity futures are pointing to a day of declines following a mixed session on Wednesday.

The Labor Department’s tally of new claims for unemployment benefits for last week rose to 861,000 higher than the expected 765,000.

Ticker Security Last Change Change %
WMT WALMART INC. 138.57 -8.68 -5.89%

Additionally, Walmart shares dropped after the Bentonville, Arkansas-based retailer swung to a net loss of $2.09 billion, or 74 cents per share, from a profit of $4.14 billion the year prior due to charges associated with the sale of its operations in the U.K. and Japan. The losses lowered earnings by $2.66 per share.

Adjusted earnings were $1.39 per share, which was below the $1.51 that was expected.

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Stocks are facing headwinds after the yield on the 10-year Treasury note held near its highest level in a year, at 1.28%. Bond rates have risen on expectations that pandemic recoveries will push inflation higher, and that has capped buying enthusiasm, as investors have sold to lock in recent gains.

Lawmakers in Washington will dig into the GameStop saga at a congressional hearing.

ROARING KITTY TO TESTIFY ON GAMESTOP ALONGSIDE HEDGE FUND MANAGERS

GameStop shares soared 1,600% in January before falling back to Earth. Entangled in the drama are huge short-selling hedge funds, a social media message board and ordinary investors wanting in on the hottest new trade. The House Financial Services Committee holds a hearing Thursday. The head of the panel, Rep. Maxine Waters, D-Calif., is homing in on hedge funds, which she says have a history of “predatory short-selling.”

It other economic news.

The Commerce Department said the number of housing starts in January slipped to a seasonally adjusted annual rate of 1.58 million, missing the 1.68 million estimate. Permits, a sign of future demand, was 1.88 million higher than the estimate of 1.678.

While the  Philadelphia Federal Reserve released its February index of manufacturing activity for eastern Pennsylvania, southern New Jersey and Delaware. It came in at a reading of 23.0 down from a stronger-than-expected reading of 26.5 in January. Any figure above zero means that more manufacturers say business conditions are improving rather than worsening.

Finally, we’ll get import and export prices data for January. Economists surveyed by Refinitiv are looking for import prices to jump 1.0%, slightly above December’s 0.9% rise. As for export prices, they’re anticipated to increase 0.7%, down from 1.1% the prior month.

The U.S. Labor Department reported Wednesday that U.S. wholesale prices surged by a record 1.3% in January, led by big gains in health care and energy prices. The bigger-than-expected increase was the largest one-month gain on records that go back to 2009.

US RETAIL SALES SURGE 5.3% IN JANUARY, BOOSTED BY $600 STIMULUS CHECKS

Underscoring signs of recovery, the Commerce Department said U.S. retail sales soared a seasonally adjusted 5.3% in January from the month before, the biggest increase since June and much larger than forecast.

Optimism that rollouts of coronavirus vaccines will set the stage for stronger economic growth in the second half of this year have been pushing shares higher.

Walmart will kick off Thursday’s earnings parade when the world’s largest retailer reports results ahead of the opening bell.

In Europe, London’s FTSE fell 0.7%, Germany’s DAX was off 0.1% and France’s CAC declined 0.4%.

In Asia, Japan’s Nikkei 225 lost 0.2%, the Hang Seng in Hong Kong shed 1.6% and China’s Shanghai Composite index returned to trading following the Lunar New Year holiday to gain 0.6%.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 31368.46 -244.56 -0.77%
SP500 S&P 500 3899.61 -31.72 -0.81%
I:COMP NASDAQ COMPOSITE INDEX 13806.107774 -159.39 -1.14%

On Wednesday, the S&P 500 slipped less than 0.1%, to 3,931.33 after handing back an early gain. The tech-heavy Nasdaq composite dropped 0.6% to 13,965.49.

The Dow Jones Industrial Average rose 0.3% to 31,613.02, a second straight record high.

The modest pickup was due in large part to gains in Verizon Communications and Chevron, which climbed after Warren Buffett’s Berkshire Hathaway said it made major new investments in them in the second half of last year.

The minutes from the Fed’s January policy meeting, released Wednesday afternoon, showed the central bank believed the pandemic still poses considerable risks to the economy. The minutes also reflected Fed officials’ widespread support for keeping interest rates low in order to boost the economy and help millions of Americans regain lost jobs.

FED MINUTES: SLOWING ECONOMY REMAINS A CONCERN AMONG OFFICIALS

Fed Chairman Jerome Powell has cautioned that inflation could accelerate for a time in coming months as the country opens up. But he and many private economists believe this will be only a temporary rise and not a sign that inflation is getting out of control.

Energy prices rose again, adding to a sharp increase the day before due to the frigid weather that’s impacted much of the U.S.

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U.S. benchmark crude oil added 2 cents to $61.16 per barrel in electronic trading on the New York Mercantile Exchange. It surged $1.09 to $61.14 per barrel on Wednesday. Brent crude, the international standard, added 7 cents to $64.41 per barrel.

The Associated Press contributed to this article.

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