U.S. stocks were mixed on Thursday as investors grappled with seasonal Covid worries and ongoing inflation concerns even as companies continued reporting blowout earnings.
The Dow fell 37 points, or 0.1%. The S&P 500 gained 0.3% and the Nasdaq Composite was 0.4% higher.
Trading has been choppy all week with the major averages wavering at the flat line, and Thursday was no exception. But the S&P and Nasdaq are still on track for a positive week and are sitting less than 1% from their records. The Dow is nearly 2% from its record.
The markets are in a normal seasonal lull coming off earnings season, according to Jay Hatfield, CEO of Infrastructure Capital Management. Seasonal Covid concerns are weighing on short-term trades too, he added.
“There’s also a lot of resistance at 4,700, which is close to the all time highs,” he said of the broad market index, which turned lower at one point in the trading session. “So that’s what happened today: as we attempted to break through 4,700 and we failed and then everything started selling off. But it’s not very deep sell off.”
Despite the mixed market moves, company earnings continue to show strength. Nvidia shares advanced nearly 10% after it reported beats on the top and bottom lines Thursday and issued a bullish revenue forecast for the current quarter ending in January. The chipmaker saw a 55% gain in data center sales from the same period a year ago and a 42% increase in gaming, its biggest market.
Those gains helped lift other chip stocks trading. Advanced Micro Devices gained more than 4%. Qualcomm and Micron Technology added about 2%. Separately, GlobalFoundries saw a big pop after revealing it entered a partnership with Ford to help the automaker increase its chip supply. It was last about 4% higher.
Retailers continued to impress as well. Macy’s and Kohl’s kicked the day off smashing quarterly profit and revenue estimates, much like their peers who reported earlier in the week.
Macy’s said same-store sales grew 35.6% and digital sales increased by 19%. It also teased the launch of a digital marketplace next year, and said 41% of its 4.4 million new customers in the quarter came through the digital channel. The company’s shares jumped almost 20%. Similarly, Kohl’s saw gains in same-store sales growth and digital. Its shares added more than 6%.
Shares of Bath & Body Works, which increased 7%, and Gap, which added 5%, were the top gainers in the S&P behind Nvidia. Victoria’s Secret also jumped more than 16%.
Elsewhere, CVS advanced almost 3% after announcing it would close 900 stores over the next three years to roll out a more digital strategy for shoppers and turn brick-and-mortar locations into destinations for healthcare services like flu shots and diagnostic tests.
Deere got a 2% lift after it came to a resolution with workers who had been on strike since Oct. 14.
Going in the other direction, Cisco Systems fell 8% due to weaker revenue guidance and a revenue miss. Kraft Heinz shares also dropped more than 3% after the company announced a secondary offering of common stock.
Initial filings for unemployment insurance fell slightly to 268,000 for the week ending Nov. 13, the Labor Department reported Thursday. That was the lowest level since March 2020, and the seventh straight weekly decline. Economists polled by Dow Jones expected them to have fallen to 260,000, compared to the previous week’s adjusted 269,000 claims.
On Wednesday, the Dow Jones Industrial Average lost 211 points, dragged down by a 4.7% loss in Visa shares. The S&P 500 dipped 0.26%. The Nasdaq Composite ticked 0.33% lower, despite most mega-cap technology companies closing in the green.
The small-cap benchmark Russell 2000 was the relative underperformer on Wednesday, dropping 1.2%.
“Recent economic reports remain strong, but today’s stock market action highlights that it is already discounting another Covid cycle,” said Jim Paulsen, chief investment strategist for Leuthold Group.
“Concerns about Covid also caused the 10-year bond yield to decline for the first time in 6 days and kept downward pressure on commodity prices including another sizable drop in crude oil prices. If inflation keeps rising while another Covid surge again stalls real economic activity, we may find out how the stock market handles a pseudo-stagflationary episode,” he added.
U.S. stocks slipped on Thursday despite strong quarterly results from Nvidia, Macy’s and Kohl’s.