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US open: Stocks mixed as investors digest a surprise uptick in weekly jobless claims

By Iain Gilbert

Date: Thursday 22 Jul 2021

US open: Stocks mixed as investors digest a surprise uptick in weekly jobless claims

(Sharecast News) - Wall Street trading got off to a mixed start on Thursday as market participants digested a surprise increase in weekly jobless claims.
As of 1530 BST, the Dow Jones Industrial Average was down 0.13% at 34,751.59, while the S&P 500 was 0.02% firmer at 4,359.36, while the Nasdaq Composite came out the gate 0.18% stronger at 14,658.79.

The Dow opened 46.41 points lower on Thursday as strong second-quarter earnings continued to flow in.

The yield on the benchmark 10-year Treasury note was slightly higher early on Thursday at 1.29%, up from the 1.17% seen earlier in the week that startled investors.

As always, market participants were digesting this week's jobless claims report, this time revealing that first time unemployment claims in the US bounced back unexpectedly in the week ended 17 July, pushed higher by the annual retooling of automakers.

According to the Department of Labor, the seasonally adjusted number of initial jobless claims rose by 50,000 over the week ended 17 July to 419,000. Economists at Barclays Research had pencilled-in a reading of 350,000. Data for the previous week was also upwardly revised by 8,000 to 368,000, while the four-week moving average of initial claims meanwhile was little changed, up 750 to 385,520, and secondary claims for the week ended 10 July dipped 29,000 to approximately 3.24m for their lowest reading since 21 March 2020.

Economic reopening plays were also in focus, with names like Royal Caribbean trading lower, while investors were also eyeing energy stocks after oil rebounded back above $70 a barrel and bank shares as a result of the more stable yields.

Also in the corporate space, second-quarter earnings from AT&T topped analysts estimates, while CSX shares advanced after the railroad operator said second-quarter profits more than doubled.

Going the other way, Texas Instruments was weighing on tech stocks after the chipmaker topped expectations but cautioned that third-quarter results would likely fall short of estimates.

Intel, Snap, Capital One and Twitter will all report after the close.

On the macro front, the Chicago Fed's national activity index declined to 0.09 in June, down from 0.26 in May, with three broad categories of indicators used to construct the index making positive contributions in June, but with two categories deteriorating when compared to May.

Elsewhere, the Conference Board's leading index improved 0.7% to 115.1 in June, just shy of consensus estimates for a reading of 1.0% and last month's revised print of 1.2%.

Still on data, US home sales bounced back in June following four consecutive monthly declines, however, the pace was moderate as higher prices and low inventory continued to weigh on the property market. Existing home sales increased 1.4% to a seasonally adjusted annual rate of 5.86m units last month, according to the National Association of Realtors, with sales rising in the Northeast, West and Midwest.

Coming up, the Kansas Fed's July manufacturing index will be published at 1600 BST.

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