Stocks mixed with investors’ interest in Powell’s testimony

US stocks lost ground on Thursday as investors prepared for more comments from Federal Reserve Chairman Jerome Powell during the second day of his testimony on Capitol Hill.

The S&P 500 rose just 0.1% after pulling back from its previous rally, and the Dow Jones Industrial Average fell 60 points, or nearly 2%. The heavy Nasdaq Composite advanced 0.9%. In the previous trading session, the three major indices closed in the red but did not change much.

Stocks attempted to maintain this week’s gains after advancing more than 2% to start the holiday’s abbreviated four-day trading period. Last week, the S&P 500 fell 5.8%, its biggest drop since March 2020, marking the benchmark’s second consecutive weekly loss of more than 5%.

US jobless claims remained near a five-month high last week in a tentative sign that the labor market may begin to cool. The Labor Department reported Thursday that applications for unemployment insurance totaled 229,000 for the week ending June 18. Economists polled by Bloomberg expected claims to come in at 226,000.

Elsewhere in economic data, the preliminary S&P Global Purchasing Managers’ Index (PMI) for June came in at 51.2, the weakest level since January and the second weakest reading for the index since the peak of the pandemic in mid-2020 – another sign. potential economic downturn.

Fed Chairman Powell became in the spotlight again Thursday as he delivers remarks on monetary policy and inflation on the second day of his testimony before lawmakers.

The US central bank chief said Wednesday to the Senate Banking Committee in prepared comments that the Fed is “strongly committed” to lowering inflation, slightly toning down language last week that suggested its fight against inflation was “unconditional.”

Powell also acknowledged in his testimony that a recession was a “possibility” and acknowledged that a soft landing would be a “very difficult” achievement in the Fed’s struggle to restore price stability.

Federal Reserve Chairman Jerome Powell testifies before the Senate Banking, Housing and Urban Affairs Committee hearing on the “Semi-Annual Monetary Policy Report to Congress,” on Capitol Hill in Washington, D.C., United States, on June 22, 2022. REUTERS/Elizabeth Frantz

“The Fed is late — it’s been late for a while,” Claro Advisors’ Ryan Bellanger told Yahoo Finance Live on Wednesday. “They had their work cut out for them […] Talk of soft landing is somewhat of a myth.”

Earlier this week, BlackRock strategists warned that a recession appears inevitable on the Fed’s path forward, arguing that the current rate hike campaign is likely to halt economic growth without necessarily solving the inflation problem.

“The Fed is not looking for a recession, although in our view a recession will be needed if it wants to bring inflation back to 2%,” the company stated.

Other Wall Street heavyweights also ramped up recession talks, with economists at Citi, Goldman Sachs and Deutsche Bank warning this week.

moving

  • Occidental Petroleum (OXY)Warren Buffett’s Berkshire Hathaway stock rose more than 4% at the start of Thursday’s session after it seized another 9.6 million shares in the oil giant on Wednesday. Berkshire owns about 152.7 million shares in Occidental, valued at approximately $8.52 billion after the purchase based on the company’s closing price on Wednesday.

  • aid rites (rad) Shares rose as much as 6% after the drugstore chain reported a smaller first-quarter profit loss than analysts had expected. The company posted an adjusted loss of 60 cents per share, less than the 66 cents per share loss forecast by Bloomberg. Rite Aid also raised its full-year revenue guidance.

  • snowflake (snow) Shares rose nearly 9% after JPMorgan raised the stock to Overweight from Neutral, citing the company’s high position in a survey of CEOs of Information. JPMorgan also said it expects a rise of up to 30% in the stock.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter Tweet embed

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