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U.S. Stocks Close Little Changed Ahead Of Inflation Data

Following the strong upward move seen late in Wednesday’s session, stocks showed a lack of direction over the course of the trading day on Thursday. Despite the choppy trading, the Dow and the S&P 500 reached new record closing highs.

The major averages eventually ended the session narrowly mixed. While the Nasdaq edged down 20.06 points or 0.1 percent to 16,379.46, the Dow inched up 47.29 points or 0.1 percent to 39,807.37 and the S&P 500 crept up 5.86 points or 0.1 percent to 5,254.35.

For the holiday-shortened week, the Dow advanced by 0.8 percent and the S&P 500 rose by 0.4 percent, but the Nasdaq fell by 0.3 percent.

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The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of the release of a Commerce Department report on personal income and spending on Friday that includes readings on inflation said to be preferred by the Federal Reserve.

While the inflation data could impact the outlook for interest rates, traders will have to wait until next Monday to react to the report due to the markets being closed for Good Friday.

Economists expect the annual rate of consumer price growth to inch up to 2.5 percent in February from 2.4 percent in January, while the annual rate of core consumer price growth is expected to come in unchanged at 2.8 percent.

The holiday will also see Fed Chair Jerome Powell participate in a moderated discussion before the Federal Reserve Bank of San Francisco Macroeconomics and Monetary Policy Conference.

With the focus on Friday’s inflation data, traders largely shrugged off a slew of U.S. economic data released this morning.

The Labor Department released a report showing first-time claims for U.S. unemployment benefits unexpectedly edged slightly lower in the week ended March 23rd.

The report said initial jobless claims dipped to 210,000, a decrease of 2,000 from the previous week’s revised level of 212,000.

Economists had expected jobless claims to rise to 215,000 from the 210,000 originally reported for the previous week.

A separate report released by the Commerce Department showed the U.S. economy unexpectedly grew by more than previously estimated in the fourth quarter of 2023.

Revised data showed real gross domestic product surged by 3.4 percent in the fourth quarter compared to the previously reported 3.2 percent jump. Economists had expected the pace of GDP growth to be unrevised.

The National Association of Realtors also released a report showing a notable rebound by pending home sales in the month of February.

NAR said its pending home sales index shot up by 1.6 percent to 75.6 in February after plunging by 4.7 percent to a revised reading of 74.4 in January.

Economists had expected pending home sales to jump by 1.5 percent compared to the 4.9 percent nosedive originally reported for the previous month.

Separately, the University of Michigan released revised data showing an unexpected improvement in U.S. consumer sentiment in the month of March.

The report said the consumer sentiment index for March was upwardly revised to 79.4 from the preliminary reading of 76.5. Economists had expected the reading to be unrevised.

With the unexpected upward revision, the consumer sentiment index for March is now above the final February reading of 76.9.

Sector News

Reflecting the lackluster performance by the broader markets, most of the major sectors showed only modest moves on the day.

Gold stocks extended the rally seen during Wednesday’s session, however, with the NYSE Arca Gold Bugs Index surging by 2.8 percent to a three-month intraday high.

The continued strength among gold stocks came as the price of gold for June delivery jumped $25.70 to $2,238.40 an ounce.

A sharp price increase by the price of crude oil also contributed to considerable strength among oil producer stocks, driving the NYSE Arca Oil Index up by 1.4 percent to a record closing high.

Housing, transportation and natural gas stocks also saw notable strength on the day, while some weakness was visible among biotechnology stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Wednesday. Japan’s Nikkei 225 Index tumbled by 1.5 percent, while Hong Kong’s Hang Seng Index advanced by 0.9 percent and Australia’s S&P/ASX 200 Index jumped by 1.0 percent.

Meanwhile, the major European markets all moved modestly higher on the day. While the U.K.’s FTSE 100 Index rose by 0.3 percent, the German DAX Index inched up by 0.1 percent and the French CAC 40 Index closed just above the unchanged line.

In the bond market, treasuries showed a lack of direction over the course of the session before closing slightly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1 basis point to 4.206 percent.

Looking Ahead

Following the long weekend, reaction to the inflation data may impact trading next Monday, while the monthly jobs report is likely to be in focus later in the week.

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