U.S. stocks dropped for the third consecutive day on Thursday as investors grappled with a conflicting economic outlook and assessed the latest corporate earnings reports in advance of the Federal Reserve’s upcoming policy meeting in early February. Market sentiment was further dampened by signs of slowing global growth and rising trade tensions.
The Dow Jones Industrial Average and S&P 500 index extended their losses to a third session on Thursday, as investors kept a close eye on further signs of a weakening U.S. economy and the latest remarks from Federal Reserve officials. The Nasdaq Composite fell 1%, marking its second day of losses.The numbers this week were another sign of a slowing economy, as first-time claims for unemployment insurance unexpectedly fell by 15,000 to 190,000 in the seven days ending Jan 14, the lowest reading since September. Construction on new U.S. homes also fell a seasonally adjusted 1.4% in December to 1.38 million, according to the Commerce Department.
However, the most notable figure of the week was the retail sales report which showed a whopping 1.1% decrease in December, marking the second month of contraction. Industrial production also slumped 0.7% in December, the biggest monthly decline since September 2021.
In response to the data, Federal Reserve Vice Chair Lael Brainard said that interest rate policy will remain accommodative for “some time” in order to support the economy and that the central bank will act as appropriate to support maximum employment and inflation. The remarks helped to reignite the market’s optimism, but investors remained cautious in light of the weak data…….[read more]
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