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- US stocks fell on Thursday after weekly jobless claims jumped to the highest level since October 2021.
- Initial jobless claims jumped by 22,000 to 264,000, which was ahead of estimates for 245,000.
- PacWest Bancorp plunged more than 20% after the bank said its deposit base fell by nearly 10% last week.
US stocks edged lower on Thursday after weekly jobless claims surged by 22,000 to 264,000, representing the highest level since October 2021.
The high jobless claims number came in ahead of economists estimates for 245,000, and it continues a recent trend of the unemployment claims ticking higher as more companies reduce their headcount and slowdown their hiring efforts.
Banking fears were renewed after PacWest Bancorp said its deposit base shrunk by nearly 10% last week after a report said it was considering a sale. The troubled bank stock plunged by more than 20% and helped drag down the Regional Banking sector ETF by 2%.
Stocks also dipped despite further signs inflation is coming down. The April Producer Price Index rose just 0.2%, below expectations for a 0.3% rise. The PPI index fell to 2.3% year-over-year in April. That follows Wednesday’s reading of the Consumer Price Index, which showed prices rose 4.9% last month, lower than economists’ estimates.
Investors remain focused on earnings results after Disney reported a decline in streaming subscriptions to its Disney+ platform. The stock fell about 6%. So far 90% of S&P 500 companies have reported first-quarter earnings so far, with 77% of those companies beating profit estimates by a median of 8%.
Here’s where US indexes stood shortly after the 9:30 a.m. ET opening bell on Thursday:
- S&P 500: 4,123.36, down 0.35%
- Dow Jones Industrial Average: 33,287.03, down 0.73% (244.30 points)
- Nasdaq Composite: 12,284.70, down 0.18%
Here’s what else is happening this morning:
- Egg prices have declined by 32% since their January peak, which has helped limit the rise of inflation in recent months.
- Top economist David Rosenberg said Microsoft’s decision to not raise salaries for its full-time employees signaled that US inflation should continue to fall.
- Bitcoin has slumped nearly 10% over the past month, putting the 2023 crypto rally in jeopardy after a strong start to the year.
In commodities, bonds and crypto:
- West Texas Intermediate crude oil fell 1.65% to $71.36 per barrel. Brent crude, oil’s international benchmark, dropped 1.58% to $75.20.
- Gold rose 0.12% to $2,039.60 per ounce.
- The yield on the 10-year Treasury fell 6 basis point to 3.37%.
- Bitcoin dropped 0.97% to $27,359, while ether fell 1.44% to $1,816.