Wall St slips as weekly jobless claims drop slightly

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By Bansari Mayur Kamdar and Devik Jain

(Reuters) – Major Wall Street indexes fell on Thursday after the latest data suggested labor market conditions remained tight, as investors assessed minutes from the Federal Reserve’s July meeting that pointed a way forward. less aggressive monetary policy tightening.

Eight of the 11 major S&P 500 sectors fell in early trading, with consumer discretionary and communication services stocks leading the losses.

Data from the Labor Department showed the number of Americans filing new claims for unemployment benefits fell last week and data for the prior period was revised down.

“Unemployment insurance claims fell again this week, showing the strength of the labor market,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

“Unfortunately, what’s good for the American worker is bad for the Fed’s attempt to bring inflation down to 2%.”

Traders still see a slightly higher likelihood of the Fed raising rates by 50 basis points in September, rather than a third hike of 75 basis points. [FEDWATCH]

“I would characterize yesterday’s release of the minutes of the last meeting as definitely less hawkish,” said Art Hogan, chief market strategist at B. Riley Wealth.

Data showing weaker-than-expected inflation in July has sparked a rally in risk on Wall Street in recent weeks, with the focus now on the Fed’s annual symposium in Jackson Hole next week.

A rate hike of 50 or 75 basis points in September would be a “reasonable” way to bring short-term borrowing costs to just over 3% by the end of the year and a little more than in 2023, said Mary, chairwoman of the San Francisco Federal Reserve. Daly said Thursday.

The Fed has raised its benchmark interest rate by 225 basis points so far this year to control high inflation for four decades.

As of 10:05 a.m. ET, the Dow Jones Industrial Average was down 97.62 points, or 0.29%, at 33,882.70, the S&P 500 was down 8.11 points, or 0.19%, at 4,265.93, and the Nasdaq Composite was down 46.37 points, or 0.36. %, at 12,891.75.

The tech-heavy Nasdaq rebounded nearly 22% from its mid-June lows, while the benchmark S&P 500 index rose 17%, buoyed by upbeat U.S. corporate results.

However, retail profits have been mixed so far, with encouraging reports from Walmart and Home Depot earlier this week, while falling Target profits dragged the retail sector down. 1.2% on Wednesday.

Kohl’s Corp fell 4% after the retailer cut its full-year sales and profit forecast.

Verizon Communications Inc fell 2.5% after MoffettNathanson downgraded shares of the telecom operator.

Falling issues outnumbered advances by a 1.13-to-1 ratio on the NYSE and a 1.45-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and 29 new lows, while the Nasdaq recorded 26 new highs and 31 new lows.

(Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru; Editing by Shounak Dasgupta)