Borrowing cost increases continued to worry the market, and coupled with weak unemployment data, U.S. stocks fell broadly on Thursday, with technology stocks remaining the main downside pushers.
The threat of cold snap disruptions in Texas showed signs of easing as Crude Oil turned lower mid-day, falling off a 13-month high.
Some commentators believe that U.S. stocks will hopefully absorb the impact of U.S. bond yields if they rise gradually and slowly this year and next, but if they pull up quickly, it could lead to big problems. Inflation rising too fast may squeeze out some of the current bubble in U.S. stocks, especially the high-tech growth stocks that are hot today.
Overnight News
The U.S. Department of Labor announced that the number of first-Time jobless claims in the U.S. was 861,000 last week, 91,000 higher than market expectations, compared to 793,000 last week.
Poweroutage.us, which aggregates data from utility websites, showed that by Thursday morning EST, about 525,000 homes and businesses in Texas, the largest oil-producing state in the U.S., were without power as power plants gradually returned to work, down significantly from Wednesday’s figure of more than 3 million homes and businesses without power. Texas grid operators said they would gradually restore local power supplies, media said Thursday.
Cheniere Energy, the largest U.S. exporter of liquefied natural gas, said Wednesday it would temporarily cut off consumption of gas and electricity to help the Texas grid, a move that could provide hundreds of millions of cubic feet of natural gas to utilities, oil and gas pipelines and electricity providers. Texas Gov. Greg Abbott has since ordered a ban on natural gas imports out of state until Feb. 21.
U.S. stocks hit a two-week low in the session, led by technology and energy stocks
The three major U.S. stock indexes opened lower in early trading, with the S&P 500 and the Dow Jones Industrial Average both hitting new lows for nearly two weeks. The Dow fell nearly 330 points when it set a new daily low, with percentage losses and the S&P both having reached 1 percent, and the Nasdaq Composite Index fell even more, once approaching 1.8 percent, hitting a new low for more than two weeks. The S&P and Nasdaq fears closed lower for the third consecutive day.
The VIX, a panic index that measures the volatility of U.S. stocks, rose 11.0% during the day to 23.87.
The S&P 500’s 11 major sectors, in addition to utilities were down in early trading, led by the energy sector, which fell nearly 2%, while information technology, industrials and communication services were down about 1%.
FAANMG six major technology stocks fell together, with Facebook, Apple and Nifty falling more than 2% during the session, Microsoft and Google parent company Alphabet fell more than 1%, and Amazon had fallen 1%.
U.S. bond yields again approaching one-year highs
U.S. 10-year benchmark Treasury yields in early Asian trading on Thursday once fell to 1.26% to refresh the daily low, down more than 1 basis point during the day, since then gradually rebounded, U.S. stocks before the market on 1.30% to erase all declines to rise, to the one-year intraday high set on Tuesday.
Gold and crude oil fell in tandem
Gold futures fell to a 7-month low as spot gold lost the $1,770 mark.
Crude oil, which has continued to rise recently on the threat of a cold snap disrupting supplies in the U.S., retreated slightly on Thursday, with both Brent and U.S. WTI crude turning lower in early U.S. trading, falling off 13-month highs, but by a smaller margin, with Brent down more than 0.5% at one point and U.S. oil down 0.8% at another.
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