Stocks close lower, S&P 500 nears bear market territory

US stocks closed lower on Thursday as concerns about Federal Reserve interest rate hikes and high inflation continued to worry investors.

The Dow Jones Industrial Average fell 236.94 points, or 0.75%, while the Nasdaq Composite fell 0.26%. The S&P 500, which ended the session down 0.58%, approached bear market territory.

The 10-year Treasury yield rose above 2.8% during the session on Thursday. Oil is trading at around $109 per barrel.

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On the economic data front, new U.S. jobless claims rose to a four-month high of 218,000 for the week ending May 14, up from 197,000 the previous week, according to the Department of Worked. Continuing claims, or the number of people already collecting jobless benefits, fell to 1.317 million in the week ending May 7, the lowest level since December 1969.

The Philadelphia Fed manufacturing index fell to a reading of 2.6 in May from 17.6 the previous month, marking the lowest level of activity in two years.

Existing home sales fell for the third straight month in April to a seasonally adjusted annual rate of 5.61 million. Sales fell 2.4% from the previous month and 5.9% from a year earlier. The median sales price of existing homes increased at a slower pace year over year of 14.8% to $391,200. With demand slowing, existing unsold home inventory rose to 1.03 million at the end of April, or the equivalent of 2.2 months of monthly sales pace.

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In earnings, BJ’s Wholesale Club beat Wall Street expectations with adjusted earnings per share of 87 cents on revenue of $4.5 billion. The stock was up more than 7% during the trading session on Thursday.

Kohl’s, meanwhile, finished with a gain of more than 4% after the retailer posted lower but better-than-expected revenue of $3.72 billion. However, the company missed Wall Street estimates with adjusted quarterly earnings of 11 cents a share and cut its full-year earnings guidance.

Ross Stores, VF Corp. and chip equipment maker Applied Materials are set to deliver results after the bell on Thursday.

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Spirit Airlines’ board of directors is urging the company’s shareholders to reject JetBlue Airways’ $30 per share public offering. Spirit, which has agreed to merge with Frontier Airlines, has said a possible JetBlue transaction would have trouble receiving regulatory approval.

Cisco Systems is down more than 13% after cutting its full-year forecast. The company reported adjusted earnings per share of 87 cents on revenue of $12.84 billion. The network equipment maker said its revenue during the quarter was negatively affected by the COVID lockdowns in China and the war in Ukraine.

Bath & Body Works is down more than 6% after cutting its full-year earnings guidance due to inflation and rising investments. The company reported better-than-expected earnings of 64 cents a share on revenue of $1.45 billion.

Shares of Under Armor fell more than 11% after a downgrade from Morgan Stanley and news that CEO Patrik Fisk would step down effective June 1.

Target fell another 5% after losing almost 25% on Wednesday. The company reported better-than-expected revenue of $25.17 billion during its fiscal first quarter of 2023, but missed Wall Street estimates with adjusted earnings per share of $2.19 due to higher costs and inventory.

Harley-Davidson fell more than 9% after the company said it would suspend all vehicle assembly and shipping, excluding LiveWire, for two weeks.

“This decision, made out of an abundance of caution, is based on information provided by a supplier outside of Harley-Davidson late Tuesday (5/17) regarding a regulatory compliance issue related to the supplier’s component part,” the statement said. company. he said in a statement.

In Asia, Tokyo’s Nikkei 225 fell 1.8%, Hong Kong’s benchmark slumped 2.5%, South Korea’s Kospi fell 1.2%, and China’s Shanghai Composite Index fell 1.2%. rose 0.3%. In Europe, the Stoxx50 sank 1.3%, the CAC40 fell 1.2%, the FTSE100 slid 1.8% and the DAX fell 0.9%.

Bitcoin is trading at the $30,000 per coin level.