Stocks Slip During Choppy Session on Fed Uncertainty
NEW YORK (TheStreet) -- Markets slid Thursday in a volatile session as concern that the Federal Reserve will begin to curb its stimulus program sometime in the coming months offset positive sentiment on corporate earnings.
The Fed earlier this week reiterated its outlook that a move to scale back monetary stimulus would require signs that the U.S. labor market is strengthening. A U.S. Labor Department jobs report issued Thursday showed that initial claims for state unemployment benefits fell by 10,000 to 340,000 last week, a sign viewed as modest at best. The data was nearly inline with economists' estimate for a decline to 339,000.
The S&P 500 fell 0.37% to close at 1,756.75 while the Dow Jones Industrial Average lost 0.42% to 15,552.55 and the Nasdaq dropped 0.28% to 3,919.71.
"We are seeing some profit taking with October 31 being the end of the fiscal year for many mutual funds, but earnings are coming in, at, or above expectations and profit margins are holding up," Eric Marshall, portfolio manager with Hodges Mutual Fund who helps oversee $1.4 billion in funds, said in a phone interview.
"The [jobless claims] reduction is welcome but given the slow feed through of second-round effects of fired-workers filing unemployment claims relating to the closure in Washington, it will take a couple more weeks before the true trend reasserts itself," Andrew Wilkinson, chief economist strategist at Miller Tabak in New York said in a note.
Technical problems in California have distorted the claims data since September, though the impact of the partial government shutdown on data appeared to be diminishing, the Department said.
Though sales rose 10.6%, Sony