DJIA: 34,160.78, down 7.31
S&P 500: 4,326.51, down 23.42
Nasdaq: 13,352.79, down 189.33

Early stock rally fades again

U.S. stocks finished lower on Thursday, with the major averages once again giving up early session gains. The Dow lost 7 points, wiping out an earlier advance of more than 600 points. The S&P 500 slipped 0.5%, erasing a morning rally of nearly 2%. The broad benchmark is now 9.8% below its January 3 record and poised for its worst month since March 2020 (-9.2% month-to-date). The Nasdaq Composite fell 1.4%, heading toward a fifth consecutive weekly decline, which would mark its longest losing streak since 2012.

Wall Street remained jittery about the Federal Reserve’s (Fed) pivot away from highly accommodative, pandemic-era monetary stimulus. Yesterday, officials set the stage for an interest rate hike in March, while Fed Chair Jerome Powell’s remarks were interpreted as more hawkish than expected.

On the data front, an advance reading of fourth-quarter U.S. GDP showed the economy expanded at a 6.9% annualized pace, capping the strongest year-over-year growth rate since 1984. Separately, weekly initial jobless claims eased to 260,000.

Treasuries were mixed, with the yield on the 10-year note retreating six basis points (0.06%) to 1.81%, while the yield on the two-year note rose three basis points (0.03%) to 1.19%, a 23-month peak. In FOREX trading, a gauge of the U.S. dollar jumped the most since March 2020, rallying 0.8% to its highest level since mid-2020.

In earnings, Tesla Inc. slid 11.6% after warning of ongoing supply chain disruptions, while Intel Corp. fell 7% following weaker-than-anticipated guidance. In other corporate news, Netflix, Inc. climbed 7.5% on reports billionaire investor William Ackman’s hedge fund purchased more than $1 billion worth of shares.

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