Stocks End Lower in Volatile Trade

U.S. stocks wobbled and bond yields fell amid continued investor concerns about the health of the economy.

Nine of the 11 S&P 500 sectors are trading lower, paced by the consumer staples (-2.2%), industrials (-1.2%), utilities (-1.2%), and financials (-1.0%) sectors. The consumer discretionary (+0.4%) and materials (+0.3%) sectors are clinging onto small gains.

Aside from Cisco, retail companies Kohl’s (KSS), The Children’s Place (PLCE), and Bath & Body Works (BBWI) each provided downside guidance, exacerbating some angst about the consumer in this inflationary environment. Note, KSS and PLCE shares have recouped early losses and now trade higher.

In addition, the latest economic data has tugged on growth concerns. Weekly initial claims were higher than expected at 218,000 (consensus 200,000), the Philadelphia Fed Index dropped to 2.6 (Briefing.com consensus 16.5) from 17.6 in April, and the Conference Board’s Leading Economic Index (LEI) decreased 0.3% m/m in April (consensus 0.0%).

The Treasury market, meanwhile, continues to act as a signpost for these growth concerns, with the 10-yr yield down seven basis points to 2.82% on increased demand for the safe-haven asset. Gold futures are also trading higher.

One consolation in today’s session is that the S&P 500 was able to hold above last Thursday’s low (3858.87), which denotes a 52-week low and the boundary for bear market territory (-20% from a recent high).

Initial claims for the week ending May 14 increased by 21,000 to 218,000 (consensus 200,000). That remains a low number historically, but relative to expectations it was a disappointment. Continuing claims for the week ending May 7, however, decreased by 25,000 to 1.317 million.