U.S. stocks traded near the flatline on Thursday, following a two-day losing streak on Wall Street.
The S&P 500 gained dipped 0.3%, while the Dow Jones Industrial Average was little changed. The tech-heavy Nasdaq Composite fell 0.4%. Technology names were hit hard in the previous session amid rising bond yields.
Investors digested a better-than-expected reading on weekly jobless claims. First-time filings for unemployment insurance in the week ended Feb. 27 totaled 745,000, a touch below the Dow Jones estimate of 750,000, the Labor Department reported Thursday.
Federal Reserve Chair Jerome Powell is set to join The Wall Street Journal Jobs Summit to talk about the economy later Thursday.
Treasury yields, which have been keeping investors on edge in recent weeks, traded flat on Thursday. The benchmark 10-year Treasury yield held steady at 1.46%. Last week, the rate soared to a high of 1.6% in a sudden move that sparked a big sell-off in stocks.
Stocks posted heavy losses during Wednesday’s regular trading as rising bond yields spooked investors. The S&P 500 dipped 1.3%, while the Dow Jones Industrial Average closed 119 points, or 0.38%, lower. The Nasdaq Composite was the relative underperformer, falling 2.7% as tech names declined. The index is on track to post its third straight negative week — the longest weekly losing streak since September.
Major averages started the week with a surge with the Dow jumping 600 points on Monday, but the rally failed to carry through amid lingering concerns about higher interest rates and tech valuations.
“Our current strategy work suggests robust economic growth this year with a modest increase in inflation,” noted Scott Wren, senior global equity strategist at Wells Fargo Investment Institute. “In attempting to read the tea leaves, the steepening of the yield curve, in our opinion, reflects the market’s belief that growth and inflation should continue to move back toward appropriate levels as the pandemic eases. We view this as a positive for stocks and other risk assets, like commodities,” he added.
During Wednesday’s session, one bright spot was companies tied to the economy’s reopening. Shares of airline and cruise line operators advanced after President Joe Biden said Tuesday that the U.S. will have enough Covid-19 vaccines for all adults by the end of May.
Additional stimulus measures could also inject optimism into the market. The Senate is currently debating the $1.9 trillion relief package passed by the House on Saturday.
“Our macro team sees the economy as spring-loaded given the vaccinations and additional stimulus,” Keith Lerner, Truist chief market strategist, wrote in a note to clients. “The ability and desire of the consumer to spend on services and experiences should lead to the best economic growth we have seen in over 35 years.”
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