- Markets still digesting Fed taper
- Jobless claims rise to nine-month high
- Existing-home sales drop
Dow Jones: -0.08%
S&P 500: -0.23%
US stocks slipped on Thursday morning, retreating after a Federal Reserve-inspired rally the day before sent the Dow Jones Industrial Average and S&P 500
to their highest-ever levels.
The pull-back comes after a wave of disappointing economic data, which revealed that jobless claims rose to a nine-month high, a fall in existing-home sales and a drop in the Philly Fed manufacturing index.
"Interestingly, though US markets closed at record highs the S&P500 was unable to make new intraday highs, stopping short of last month's high, and that fact could precipitate a pullback, particularly if we drop back below 1,800 again," said Michael Hewson, Chief Market Analyst at CMC Markets. The S&P 500 was trading 0.23% lower at around 1,806 in mid-morning trade.
Markets surged on Wednesday after the Fed announced that it would scale back its monthly bond-buying programme from $85bn to $75bn and said it would make similar moderate reductions in the future subject to incoming economic data.
Policymakers predicted that the jobless rate - currently at 7% - would drop to around 6.5% by the end of 2014. However, they stressed that interest rates would be held close to zero "well past the time that the unemployment rate declines below 6.5%, especially if projected inflation continues to run below the [FOMC's] 2% longer-run goal".
Economic data misses forecasts
Jobless claims unexpectedly climbed by 10,000 to 379,000 in the week ended December 14th, the most since the end of March, Labor Department data showed. Economists had called for a decrease to 336,000.
The Philadelphia Fed manufacturing index rose from 6.5 to 7.0 in December, compared with the consensus estimate of a jump to 10.
Existing-home sales fell for the third month in a row in November, dropping by 4.3% to a seasonally-adjusted annual rate of 4.9m, according to the National Association of Realtors. Analysts had expected a figure closer to 5m.
Not all economic data disappointed though, as an index of leading economic indicators increased 0.8% in November after gaining a revised 0.1% the prior month. The forecast was for a 0.7% rise.
Carnival impresses with results
Ocean cruise operator Carnival impressed with its final results, as revenues and earnings were not as bad as feared thanks to a successful marketing push in the fourth quarter and encouraging noises about "momentum" as it enters 2014.
Facebook declined after saying the company and some shareholders, including Chief Executive Officer Mark Zuckerberg, will sell 70m shares.
Oracle Corp. gained after forecasting third-quarter sales and profit in line with analysts' estimates.