US Stock Market Overview – Stock Rise Driven by Healthcare; Energy Shares Slip

David Becker

US stocks moved higher on Thursday, but the move was measured, as trade issues and geopolitics remain in the headlines. Earnings have continued to come out mixed. While most of the financial have beat the street, technology shares have been less upbeat. IBM reported earnings on Wednesday after the closing bell that were weaker than expected while Netflix beat but the number of new users missed expectations. CSX reported better than expected earnings and painting an upbeat picture of the US economy. Most sectors were higher, led by healthcare, energy shares bucked the trend.

Energy Shares Slip on Inventory Report Build

Energy shares continue to feel downward pressure as oil prices moved lower on Thursday following a larger than expected build in stockpiles. According to the EIA US commercial crude oil inventories increased by 9.3 million barrels from the previous week. Expectations were for a 3-million-barrel build. Gasoline inventories decreased by 2.6 million barrels last week. Distillate fuel inventories decreased by 3.8 million barrels last week and are about 11% below the five-year average for this time of year. Total petroleum inventories decreased last week by 1.6 million barrels last week.

Demand remains strong. Total products demand over the last four-week period averaged 21.1 million barrels per day, up by 5.4% from the same period last year. Gasoline demand averaged 9.3 million barrels per day, up by 2.6% from the same period last year.

US Housing Starts Drop

US Housing starts dropped 9.4% to an annual rate of 1.256 million units last month. Data for August was revised higher to show homebuilding accelerating to a pace of 1.386 million units, which was the highest level since June 2007. Expectations were for housing starts to decline to a pace of 1.320 million units in September. Housing starts rose 1.6% year over year in September. Building permits fell 2.7% to a rate of 1.387 million in September. Permits jumped to a rate of 1.425 million units in August, the highest level since May 2007.

Jobless Claims Rise Slightly

The Labor Department reported that US jobs claims remain subdued rising slightly less than expected. Jobless claims increased 4,000 to 214,000 for the week ended October 12 while the prior week was unrevised. Expectations were for claims to rise by 5,000 to 215,000 in the latest week. The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out volatility, rose 1,000 to 214,750 last week.

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