US stocks were mixed on Thursday after Fed’s hawkish tone on the interest rate policy. Dow Jones index opened the markets lower after the release of US weekly initial jobless claims data. S&P 500 index remained unchanged while Nasdaq index rose.
US Economic Concerns
The Dow Jones index fell after the release of weekly initial jobless claims data. According to the Labor Department, the initial jobless claims rose to 412,000. This was a 37,000 increase from the previous week’s 376,000.
Insured employment rate was 2.5% in the week ending June 5. The insured employment numbers inched higher to 3,518,000. This was a 1,000 increase from the previous week’s figures.
Actual unadjusted initial claims under state programs came in at 402,352 in the week ending 12th June. This was a 10.2% jump from the previous week’s data.
The Fed’s decision on Wednesday saw the Dow Jones index close the markets lower. Fed chair, Jerome Powell signaled an earlier than expected tapering of the monetary policy. While addressing reporters, Powell mentioned that the Fed could introduce two rate hikes in 2023. This will be a year earlier than expected.
However, the central bank kept its interest rates and monthly bond purchases unchanged. The Fed said that the economy is not yet stable. According to Powell, supply bottlenecks were the main hinderance in the economy.
Crude oil prices weakened while the US dollar hit a 2-month high after the Fed’s decision. The Fed will be on the look out for economic recovery in the upcoming months. It will discuss whether to retreat from its $120 billion in monthly bond purchases.
Philadelphia Economic Outlook
The US Philadelphia Fed Manufacturing index edged lower to 30.7 missing its 31.0 forecast. Employment index went up by 11 points. 52% of the firms reported steady employment levels. The index for new orders fell 10 points to 22.2.
Current shipments index was up 6 points to 27.2. 41% of the companies in the state reported gains in shipment in June. 14% of the companies reported losses in shipment.
Prices paid diffusion index rose for the second consecutive month. This was the highest growth rate since June 1979. 82% of the companies recorded increases in input prices. Current prices received index was on an uptrend for 4 consecutive months- The highest since October 1980.
Dow Jones Performers
Salesforce.com Inc was the best performer in the Dow Jones index. The company gained more than 1% in its stock prices. Visa Inc and Intel Corp boosted the index after recording gains. Apple Inc was also among the top gainers in the index for the fourth consecutive day this week.
Among the worst performers in the index include Dow Inc, Caterpillar Inc, and Nike Inc. Dow Inc dropped by more than 1.6% while Caterpillar Inc dropped by 1.7%. Nike Inc declined by 1.3%.