By William Watts and Thornton McEnery
U.S. stock indexes fell slightly on Thursday, snapping a five day win streak for the S&P 500 index, after investors weighed data on second quarter economic growth and weekly jobless benefit claims, a day ahead of a speech by Federal Reserve Chairman Jerome Powell.
The pause comes after the S&P 500 index on Wednesday notched its 51st record high of 2021, matching the highest number of new records at this point in the year since 1995, according to Dow Jones Market data, while the Nasdaq Composite also notched a record finish.
How stock benchmarks traded
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.46% closed down 192.38 points or 0.54% today to 35213.12
The S&P 500 /zigman2/quotes/210599714/realtime SPX +0.39% finished down 26.27 points or 0.58% today to 4469.92.
The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.13% fell 96.05 points or 0.64% today to 14945.81
What’s drove the market?
Stocks succumbed to a pullback after the major equity indexes climbed for at least four consecutive days, registering a series of records.
A pair of deadly bombings outside of Afghanistan’s Kabul airport may have also affected risk tolerance and contributed to some selling pressure, analysts said.
In economic data, the Labor Department said first-time jobless claims rose 4,000 last week to 353,000, the first rise in five weeks, slightly above forecasts for a reading of 350,000 after dipping to a pandemic low in the previous week.
A second estimate of U.S. gross domestic product, the official scorecard of U.S. economic expansion, showed annualized growth of 6.6% , compared with an initial reading of 6.5%. Economists had looked for a revised rate of 6.7%.
“Jobless claims have remained contained, despite the resurgence in cases due to the delta variant, and the economy continues to expand at a fast rate, so investors will look ahead to Chairman Powell’s speech tomorrow,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
“Assuming Fed Chair Powell doesn’t make any news with his speech — and he is widely believed to keep all of his options open by not hinting at the timing of the much-awaited Fed Taper announcement — then all eyes will then turn to the August jobs report, which will be released on Sep. 3,” he said, in emailed comments.
Powell will speak at 10 a.m. Eastern Friday at a Jackson Hole symposium of global central bankers that is being held virtually, and could provide some guideposts for the timing and pace of the Fed’s plans to scale back on crisis-era policy accommodations. However, expectations that Powell will use the venue as an opportunity to broach the subject of tapering have diminished since last week amid the spread of the highly transmissible delta variant of COVID-19.
“I think they are going to push taper until next year,” said Michael Antonelli. a managing director and market strategist at Baird. “Them making the conference virtual doesn’t signal “let’s start getting more hawkish” to me.”