US Stock Market Overview – Stocks Closed Lower as China Concerns Rise

US stocks moved lower Thursday as worse than expected economic data, reversed the trend in the S&P 500 index. President Trump announced that he planned to have a press conference on Friday that would discuss issues related to China. That took the wind out of the sales of investor sentiment. GDP contracted by more than expected, Durable Goods Orders tumbled as demand for transportation equipment collapsed. Initial jobless claims have decelerated but it still climbed by 2.1 million. Most sectors in the S&P 500 index were lower, despite the rally in the broader markets. Utilities were are defensive, were the best performing sector, cyclical bucked the trend. US yields were nearly unchanged on Thursday while oil prices rose following news that oil production continued to decline in the US. This helped buoy energy shares.

GDP Shrank More than Expected

GDP which is the broadest measure of economic health, fell at an annual rate of 5% in the Q1 a bigger decline than the 4.8% drop first estimated a month ago. It was the biggest quarterly decline since an 8.4% fall in the fourth quarter of 2008.

Durable Goods Orders Fell

US durable goods, plunged 17.2% in April after dropping 16.6% in March. Demand for transportation equipment collapsed by 47.3%. New orders of capital goods tumbled in April and shipments declined. Orders for non-defense capital goods excluding aircraft, which is a proxy for business spending, dropped 5.8% last month, according to the Commerce Department. Data for March was revised lower to show these so-called core capital goods orders falling 1.1% instead of dipping 0.1% as previously reported. Expectations had been for core capital goods orders diving 10.0% in April. Core capital goods orders dropped 1.3% year over year in April.

Jobless Claims Rise

Initial jobless claims totaled 2.1 million last week, the lowest total since the coronavirus crisis began. Expectations were for 2.05 million. The total represented a decrease of 323,000 from the previous week’s upwardly revised 2.438 million. Continuing claims, numbered 21.05 million, a clearer picture of how many workers are still sidelined. That number dropped sharply, falling 3.86 million from the previous week.

For a look at all of today’s economic events, check out our economic calendar.