Wall Street had a mixed Thursday, thanks to concerns about continuing inflation. Wholesale inflation numbers came in lower than March but remained high. Robust labor market numbers could not lift investor mood, but stocks pared losses as the Senate confirmed Jerome Powell for the second term, giving him more time to tackle inflation as Fed chairman. Two of the three major indexes ended in the red, while one ended in the green.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) fell 0.3% or 103.8 points to close at 31,730.3. Seventeen components of the 30-stock index ended in the red, one remained unchanged, while 12 ended in the green.

The tech-heavy Nasdaq Composite added 0.1% or 6.73 points to close at 11,370.96.

The S&P 500 dipped 0.1% or 5.1 points to end at 3,930.08. However, six of the 11 broad sectors of the benchmark index closed in the green.

The Communication Services Select Sector SPDR (XLC), the Health Care Select Sector SPDR (XLV), and the Real Estate Select Sector SPDR (XLRE) gained 1.1%, 1% and 0.7%, respectively, while the Technology Select Sector SPDR (XLK) dropped 1%.

The fear-gauge CBOE Volatility Index (VIX) decreased 2.4% to 31.77. A total of 16.2 billion shares were traded on Thursday, higher than the last 20-session average of 13 billion. Decliners outnumbered advancers on the NYSE by a 1.15-to-1 ratio. On the Nasdaq, a 1.15-to-1 ratio favored advancing issues.

Wholesale Inflation Numbers Keep Investors Worried

Labor Department reported that the Producer Price Index (PPI) for final demand increased 0.5% in April, following a 1.6% increase in March, and the year-over-year index increased 11% through to April 2022. Even though the numbers were lower than the prior period, which was March, they were high enough for investors to worry that the Fed would have to increase interest rates at an accelerated pace. The general opinion remained that inflation has already peaked but is yet to ease off.

Core PPI numbers, which exclude food, energy and trade services prices, increased by 0.6% in April after advancing 0.9% in March. The year-over-year increase in core PPI came in at 6.9%.

Powell Getting A Second Term Garners Positive Response

Fed Chairman Jerome Powell was recently vocal about fighting red-hot inflation. His policy moves such as raising interest rates and shrinking the central bank’s $9 trillion balance sheet have met with skepticism because of recessionary worries but are also looked upon as necessary to tackle inflation. The Senate, on Thursday, confirmed Powell for the second straight term, and the reaction of the markets seemed to be positive. The S&P 500, especially, was veering precariously close to bear market levels before the news somewhat bucked the trend.

Utilities and technology stocks were the worst hit in the session, before Nasdaq managed to turn things around late in the day. Consequently, stocks like Lucid Group, Inc. LCID went up by 13.2% and Microsoft Corporation MSFT dropped by 2%. Microsoft carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

The Labor Department said on Thursday that initial jobless claims increased to 203,000, rising 1,000 for the week ending May 7. The four-week moving average also increased to 192,750, an increase of 4,250 from the previous week’s revised average of 188,500.

Continuing claims came in at 1,343,000, decreasing 44,000 from the previous week’s revised level, and reflecting the lowest level since Jan 3, 1970. The previous week's numbers were revised up by 3,000 from 1,384,000 to 1,387,000. The 4-week moving average came in at 1,385,000, a decrease of 32,750 from the previous week's revised average.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Microsoft Corporation (MSFT) : Free Stock Analysis Report
 
Lucid Group, Inc. (LCID) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research