Stocks Finished Mixed after Russia Investigation News Rattles Investors

The major U.S. stock indexes posted a wicked two-side trade on Thursday before settling mixed for the session. Most of the whip-saw action was attributed to a report that the Russia investigation is intensifying. Some of the volatile trade was related to concerns about overvaluation and position-squaring ahead of Friday’s U.S. Non-Farm Payrolls report.

According to a report from The Wall Street Journal released minutes before the close, Special Counsel Robert Mueller impaneled a grand jury in his investigation into Russia’s involvement in the U.S. election.

The news pushed all major indexes lower for the day, but the Dow was able to recover enough to post is seventh straight record close. The S&P 500 and the NASDAQ Composite hit new session lows on the news, but managed to cut the loss before the close.

After Apple reported blowout earnings earlier in the week, the reaction to fresh earnings reports on Thursday was a little subdued. Allergan, Global Payments, and Kellogg posted quarterly results before the opening. Motorola Solutions, Viacom and Western Union were set to report after the closing bell.

Economic News

Challenger Job Cuts came in better-than-expected at -37.7%. Traders were looking for -19.3%. Weekly Unemployment Claims were in line with expectations, coming in at 240K versus 242K.

Final Services PMI came in higher-than-expected at 54.7 versus 54.2. ISM Non-Manufacturing PMI was a big disappointment. It fell to 53.9, down from 57.4. Traders had price in a 56.9 reading.

Finally, Factory Orders rose 3.0%, slightly above the estimate and well above the -0.3% previous reading.

Gold

The gold market posted a wide range after recovering from early session weakness. However, the buying wasn’t strong enough to turn the market higher for the session. Despite the lower closer, it continued to remain close to its 7-month high.

Gold was supported by the possibility the Fed will refrain from further rate hikes this year due to reports of low inflation. Stock market weakness also signaled a drop in demand for higher risk assets. This may have sent some money into gold in the form of hedge protection.

Crude Oil

Crude oil prices weakened on Thursday after hedging pressure increased as the U.S. West Texas Intermediate futures contract neared the $50.00 level. Concern about high crude supplies from OPEC and other non-OPEC producers offset the U.S. government report from Wednesday which showed record U.S. gasoline demand.

Strong demand from the U.S. has been lifting prices for about a month, but the market has been capped by high production from OPEC.