Market Snapshot: U.S. stock futures slip after retail sales and jobless claims data

market-snapshot:-us.-stock-futures-slip-after-retail-sales-and-jobless-claims-data

U.S. stocks traded higher after the open Thursday as investors reacted to the ongoing inversion in the Treasury yield curve, along with a host of economic data and a tentative deal to avoid a nationwide railway strike.

What’s happening
  • The Dow Jones Industrial Average DJIA was up 115 points, or 0.4%, to 31,255.
  • The S&P 500 SPX advanced 10 points, or 0.3%, to 3,957.
  • The Nasdaq Composite COMP rose 37 points , or 0.3%, to 11,758.

On Wednesday, the Dow Jones Industrial Average DJIA rose 30 points, or 0.1%, to 31135, the S&P 500 SPX increased 13 points, or 0.34%, to 3946, and the Nasdaq Composite COMP gained 86 points, or 0.74%, to 11720.

What’s driving markets

The White House announced that a deal to avert a railway strike set for midnight was reached. The stocks of railroad operators including Union Pacific UNP rose in premarket trade.

Wall Street had fretted such a strike could exacerbate inflation at a time when consumer prices already were rising at a clip of 8.3% year-over-year in August.

In U.S. data Thursday retail sales rose 0.3% in August as Americans spent more on new cars and trucks and went out to eat more, suggesting the economy grew at at a steady pace toward the end of the summer.

Meanwhile new jobless benefit claims fell by 5,000 to 213,000 in the week ended Sept. 10, the Labor Department said, suggesting the labor market remains healthy.

However, two regional gauges of manufacturing sentiment moved into slight contraction territory in September, according to data released Thursday.

In addition to the economic data and railway news, Art Hogan, chief market strategist at B. Riley Financial, said investors were also closely scrutinizing the ongoing inversion of the 2s/10s yield curve, as the 2-year yield briefly traded more than 40 basis points above the 10-year yield.

“There are three inputs driving markets today and the largest of them is people being hyper-focused on the yield curve, especially the two year, which remains stubbornly high,” Hogan said.

“This is a reflect of our interpretation of what monetary policy will be in the short term.”

The inversion of the yield curve eased somewhat as stocks rose shortly after the open, with the 2-year yield BX:TMUBMUSD02Ywas up 5.9 basis points to 3.835%, while the 10-year yield BX:TMUBMUSD10Yis up 2 basis points to 3.435%.

The ICE U.S. Dollar Index DXY, which often rises when Treasury yields climb, was also marginally higher at 109.67.

Stocks in focus

Adobe Inc. ADBE shares were falling 14% after the software company fell short with its revenue outlook for the current quarter and announced plans for a $20 billion merger deal.

Hear from Carl Icahn at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. The legendary trader will reveal his view on this year’s wild market ride.

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