The stock market indexes held higher Thursday afternoon as the benchmark Treasury yield reversed lower. Investors are girding for an inflation report Friday and a possible government shutdown this weekend.
The Nasdaq composite was up 1% at 1:20 p.m. ET, still holding the 13,000 level. Continued support at that price would bode well for the stock market, but indexes remain in a correction.
Indexes seem to be bouncing off oversold levels. And two days ago, the Cboe Market Volatility index rose more than 20% above its 10-day moving average. That signal has marked market lows in the past.
The S&P 500 rose 0.7%. The Dow Jones Industrial Average rose 0.3% and continued below the 200-day moving average. The Russell 2000 climbed 1%.
Volume rose on the Nasdaq and the NYSE compared with the same time on Wednesday. Advancers topped decliners by nearly 2-to-1 in the Nasdaq and by 12-to-5 in the NYSE.
The Innovator IBD 50 ETF outperformed with a 1.2% afternoon increase. Fabrinet led the IBD 50 with a 5% gain that cleared a short consolidation.
Stocks Take Data In Stride
Thursday's economic data didn't bother the stock market much.
Jobless claims increased by 3,000 to 204,000 last week. Economists had expected 211,000 initial claims for benefits, according to Econoday. Pending home sales fell 7.1% in August. That's well off the 0.5% increase the previous month, the National Association of Realtors reported.
The final second-quarter GDP estimate came in at 2.1% growth, unchanged from the previous estimate and slightly below the consensus forecast of 2.3%.
Jeffrey Roach, chief economist for LPL Financial, noted that the GDP report's consumer spending was revised down to a 0.8% annualized growth rate, the slowest pace since the peak of the pandemic. "The consumer is much weaker than initially thought as economic momentum slows," Roach said. "The key takeaway is consumers are nearing the end of their spending splurge."
The yield on the 10-year Treasury note rose to 4.65% this morning, but reversed lower 2 basis points to 4.60%. It's still near 2007 highs.
The U.S. personal income and spending report for August comes out Friday. It will include an important inflation gauge: the personal consumption expenditures index, which is regarded as the Fed's most valuable inflation data point.
House Speaker Kevin McCarthy said funding for border security is being discussed as a way to break the budget impasse. He said the two sides would reach a deal on time. Federal nonessential services will shut down Sunday unless lawmakers reach a budget agreement by midnight Saturday. Past shutdowns haven't hurt the stock market much.
Among major stocks, Alphabet and Meta Platforms are rising back above their 50-day moving averages.
Stock Market Earnings Movers
Workday plunged 9% but bounced off its 200-day moving average. The human resources software company cut its outlook for subscription revenue growth at an analyst day Wednesday. Workday is on track for its worst day since Nov. 20, 2020, when it fell 9.3%.
Accenture tumbled 4.5% in heavy volume, causing its breakout at 324.19 to fail due to a sell signal. Early Thursday, the global tech services and consulting firm beat earnings expectations, but revenue missed views due to weak bookings. The company's sales outlook for the fiscal year that started this month came in below expectations.
Jabil rose 17% and gapped above the 50-day moving average to a new high. The electronics contract manufacturer posted mixed August-quarter results early Thursday. Earnings were better than expected, but sales and revenue guidance lagged views.
Turning to retail, CarMax skidded nearly 10%. The used-car seller's August-quarter earnings fell 5% to 75 cents a share. Revenue slid 13% to $7.07 billion as results came in basically in line with estimates. It was the seventh straight quarter of declining earnings amid a sluggish used-car market.
Other Retailers Move In Stock Market
Also in retail, GameStop named company Chairman Ryan Cohen its new chief executive. Cohen, who owns about a 12% stake in the company, joined the GameStop board in early 2021 and was elevated to chairman in June 2021. He will work without pay, the video game retailer said. GameStop, which had been looking for a CEO since June, saw shares reverse lower.
Costco continued to rise from Tuesday's earnings report and is trying to top the 571.16 buy point of a flat base. Volume is heavy, but the stock price is slightly below the entry. The retailer is offering its members $29 virtual health care visits through its deal with online marketplace Sesame.
Micron Technology trimmed losses and was down nearly 3% in afternoon trading. The memory-chip company late Wednesday beat fiscal fourth-quarter profit and revenue, but its outlook was mixed. A loss of more than 7% from a 72.23 buy point has triggered a sell signal.
Beaten-down Peloton Interactive jumped 6% after the fitness company announced late Wednesday it will develop digital fitness content for Lululemon Athletica. Lululemon was nearly flat. The companies will also partner on co-branded apparel, and Lululemon will stop selling the Studio Mirror exercise device, a Peloton rival.
