NEW YORK (AP) — U.S. stocks are falling Thursday as momentum on Wall Street cools after a recent record-setting day.
The S&P 500 was down 0.1% in midday trading, a day after hitting its 25th all-time high this year. The Dow Jones Industrial Average was up 63 points, or 0.2%, as of 11:30 a.m. Eastern time, and the Nasdaq Composite was down 0.2%, a day after hitting a record high.
Big Lots reported a bigger-than-expected loss in its most recent quarter, sending its shares down 19.4%, and the company said it missed sales targets as customers continued to cut back on spending, especially on non-essential items.
Another retailer, Five Below, made more discouraging comments about its customers. The company’s profit and sales last quarter fell short of analysts’ expectations, and CEO Joel Anderson said the results were hurt by struggles to attract core lower-income customers, despite strong growth among higher-income customers. Five Below shares fell 12.7%.
Many retailers and other businesses are highlighting the disparity between lower-income and higher-income customers. Inflation, in particular, Harassing the lower classesEven though inflation is not rising as fast as before, some Americans are still struggling to keep up with the rising cost of living, threatening to crack the robust spending by U.S. households that has kept the U.S. economy out of recession despite high interest rates.
Another factor keeping U.S. consumer spending going strong is a very strong jobs market, though Thursday’s report indicated that it too may be weakening a bit.
The growing number of U.S. workers I applied for unemployment benefits Last week’s reading was lower than the previous week, when economists had expected a slight decline. While the reading is still low by historical standards, it could signal a slowdown in the jobs market.
Wall Street actually wants that slowdown because it will keep inflation in check and force the Federal Reserve to deliver the interest rate cuts that traders crave. The danger is that the slowdown will go too far and tip into a recession, ultimately causing stock prices to fall.
A separate report released Thursday said U.S. worker productivity wasn’t as strong as economists thought in the first three months of the year, which could be a disappointing sign for markets. That’s important because a big productivity boost could allow U.S. workers’ wages to continue to rise without putting much upward pressure on inflation.
Treasury yields remained relatively steady after the economic report, with the 10-year Treasury yield remaining at 4.28%, consistent with Wednesday’s close.
The yield on the two-year note, which is highly volatile due to expectations of Fed action, fell slightly to 4.72% from 4.73%.
On Wall Street, Lululemon Athletica Inc. rose 4.6% after it reported its latest quarterly profit that beat analysts’ expectations, mainly due to strong sales growth outside the Americas. JM Smucker Inc., maker of Uncrustables and Jif peanut butter, rose 5.4% after it also beat profit expectations.
Robinhood Markets rose 6.1% after it said it had agreed to acquire cryptocurrency exchange Bitstamp Inc. Robinhood said the deal, which still requires regulatory approval, would gain customers around the world, including in the European Union and Asia.
Nvidia Inc. reversed an early gain and fell 1.8% for the day after becoming just the third company to surpass $3 trillion in market capitalization. The semiconductor company is riding a wave of enthusiasm for artificial intelligence technology.
The big event of the week is likely to come on Friday, when the U.S. government releases its latest monthly report on the job market, with economists expecting hiring to accelerate slightly from the previous month and average hourly earnings to rise.
For now, few expect any changes to interest rates when the Federal Reserve meets next week, but there is still hope the central bank will cut its key interest rate at least once this year from its highest level in more than two decades.
of European Central Bank The European Central Bank was the last in the world to cut its own interest rates on Thursday. ECB President Christine Lagarde said inflation had eased enough to allow interest rates to be lowered, but declined to comment on the path to further rate cuts.
European stock indexes rose slightly following the widely expected decision. Stocks were mixed in Asia, with Tokyo up 0.6 percent and Shanghai down 0.5 percent, while Seoul was closed for a public holiday.
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AP writers Matt Ott and Jimmo Zhong contributed.
