© Reuters. Traders work at the New York Stock Exchange (NYSE) in New York City, United States, on October 26, 2023. Reuters/Brendan McDiarmid
By Sinead Carew and Srishti Achar A
(Reuters) – The Nasdaq managed to post modest gains on Thursday, while the Dow Industrial Average closed slightly lower under pressure from tech and retail giants Cisco and Walmart (NYSE:) after disappointing forecasts.
Cisco Systems (NASDAQ:) shares fell 9.8% as the communications and networking technology company cut its full-year revenue and profit forecasts on slowing demand for its networking equipment. Also in the technology sector, shares of Palo Alto Networks (NASDAQ:) fell 5.4% late Wednesday after second-quarter earnings forecast missed expectations.
Walmart shares fell 8.1% a day after hitting a record high. The retail giant said US consumers are spending cautiously due to inflation, even as it raised its annual forecast for sales and profit.
That helped send the S&P 500 consumer staples index down 1.2% and pressured retailers, with Dollar General (NYSE:) and Dollar Tree (O:) both falling 4.2%.
Additionally, Target fell 0.4%, giving back some gains from the previous session, in which it rose 17.8% after providing an increasingly strong holiday-quarter outlook.
Earlier this week, Wall Street indexes rose sharply as data suggested US inflation was slowing and raised hopes the US Federal Reserve could raise interest rates. Additionally, some concerns were eased by the passage this week of a stop-gap bill to prevent a government shutdown.
Noting that Cisco and Walmart “are the backbone of their respective industries”, Paul Nolte, senior wealth advisor and market strategist at Murphy & Sylvester, said their weakness “raises a little question about the health of the consumer and perhaps the health of the technology sector.” “
But others noted positive countervailing forces in Thursday’s session, including gains in megacaps Microsoft Corporation (NASDAQ:), Apple Inc (NASDAQ:) and Nvidia (NASDAQ:).
“The major indices are largely flat on the day, but you’re still seeing a lot of strength in big-cap tech or growth. This is a continuation of the positive story we’ve seen in the market recently,” Tim said. Grisky, senior portfolio strategist at Ingalls & Snyder in New York.
Specifically, Grysky cited investors’ relief that the Federal Reserve appears to have completed its rate hike cycle.
Earlier, a report from the Labor Department showed that weekly unemployment claims increased by more than expected, bolstering claims that the Fed will not need to raise rates further.
The index fell 45.74 points, or 0.13%, to 34,945.47, the S&P 500 rose 5.36 points, or 0.12%, to 4,508.24, and the index rose 9.84 points, or 0.07%, to 14,113.67.
Energy led 11 major S&P sectors with a 2.1% decline, hitting a four-month low, as crude oil prices dropped nearly 5%. [O/R], Communication services was the sector with the strongest progress during the session with a rise of 0.9%, followed by information technology which rose 0.7%.
“The big driver today is the tug-of-war between those who want to sell on rallies and those who want to buy on dips,” said Brian Jacobsen, chief economist at Annex Wealth Management.
“The economic data is not bad enough to cause too many recession fears, but it is also not good enough to cause too much euphoria. We are entering a period with the holidays where small surprises can impact prices. “Could have a huge impact.”
According to CME Group’s (NASDAQ:) FedWatch tool, the money market is based entirely on the likelihood that the Fed will keep rates on hold in December, and there is a 62% chance of a rate cut of at least 25 basis points in May.
Among individual stocks, Macy’s (NYSE:) shares rose 5.7% after the department store operator’s quarterly sales beat analysts’ estimates.
Declining issues outnumbered advancing ones on the NYSE by a ratio of 1.42-to-1; On the Nasdaq, a 1.97-to-1 ratio favored declines.
The S&P 500 posted 15 new 52-week highs and 2 new lows; The Nasdaq Composite recorded 40 new highs and 123 new lows.
10.71 billion shares changed hands on U.S. exchanges, compared with the 11.09 billion average over the past 20 sessions.
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