U.S. Stocks Lack Direction As Inflation Data Looms

Following the strong upward move seen late in the previous session, stocks are showing a lack of direction during trading on Thursday. The major averages have spent the day bouncing back and forth across the unchanged line.

Currently, the major averages are slightly higher. While the S&P 500 is up 4.68 points or 0.1 percent at 5,253.17, the Nasdaq is up 0.69 points or less than a tenth of a percent at 16,400.21 and the Dow is up 3.90 points or less than a tenth of a percent at 39,763.98.

The choppy trading on Wall Street comes as traders seem reluctant to make significant moves ahead of the release of a Commerce Department report on personal income and spending on Friday that readings on inflation said to be preferred by the Federal Reserve.

While the inflation data could impact the outlook for interest rates, traders will have to wait until next Monday to react to the report due to the markets being closed for Good Friday.

Economists expect the annual rate of consumer price growth to inch up to 2.5 percent in February from 2.4 percent in January, while the annual rate of core consumer price growth is expected to come in unchanged at 2.8 percent.

The holiday will also see Fed Chair Jerome Powell participate in a moderated discussion before the Federal Reserve Bank of San Francisco Macroeconomics and Monetary Policy Conference.

With the focus on tomorrow’s inflation data, traders have largely shrugged off a slew of U.S. economic data released this morning.

The Labor Department released a report report showing first-time claims for U.S. unemployment benefits unexpectedly edged slightly lower in the week ended March 23rd.

The report said initial jobless claims dipped to 210,000, a decrease of 2,000 from the previous week’s revised level of 212,000.

Economists had expected jobless claims to rise to 215,000 from the 210,000 originally reported for the previous week.

A separate report released by the Commerce Department showed the U.S. economy unexpectedly grew by more than previously estimated in the fourth quarter of 2023.

Revised data showed real gross domestic product surged by 3.4 percent in the fourth quarter compared to the previously reported 3.2 percent jump. Economists had expected the pace of GDP growth to be unrevised.

The National Association of Realtors also released a report showing a notable rebound by pending home sales in the month of February.

NAR said its pending home sales index shot up by 1.6 percent to 75.6 in February after plunging by 4.7 percent to a revised reading of 74.4 in January.

Economists had expected pending home sales to jump by 1.5 percent compared to the 4.9 percent nosedive originally reported for the previous month.

Separately, the University of Michigan released revised data showing an unexpected improvement in U.S. consumer sentiment in the month of March.

The report said the consumer sentiment index for March was upwardly revised to 79.4 from the preliminary reading of 76.5. Economists had expected the reading to be unrevised.

With the unexpected upward revision, the consumer sentiment index for March is now above the final February reading of 76.9.

Sector News

Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.

Gold stocks are extending the rally seen in the previous session, however, with the NYSE Arca Gold Bugs Index jumping by 1.9 percent to a three-month intraday high.

The continued strength among gold stocks comes as the price of gold for June delivery is climbing $20.10 to $2,232.80 an ounce.

Oil service, housing and airline stocks are also seeing some strength on the day, although buying interest has remained relatively subdued.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance on Wednesday. Japan’s Nikkei 225 Index tumbled by 1.5 percent, while Hong Kong’s Hang Seng Index advanced by 0.9 percent and Australia’s S&P/ASX 200 Index jumped by 1.0 percent.

Meanwhile, the major European markets have all moved modestly higher on the day. While the U.K.’s FTSE 100 Index has risen by 0.4 percent, the French CAC 40 Index and the German DAX Index are both up by 0.1 percent.

In the bond market, treasuries have bounced back near the unchanged line after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 4.198 percent.

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