The momentum that has stocks headed for a third straight weekly win stalled out Thursday as investors took in several economic reports and a handful of corporate earnings updates.
Kicking things off was data from the Labor Department that showed initial jobless claims jumped 13,000 last week to 231,000 – a three-month high.
"Jobless claims were a welcome addition to recent data that pointed to a slight cooling in the labor market and, perhaps, the U.S. economy," says Craig Erlam, senior market analyst at OANDA. "Of course, we're talking about a very small step in the right direction, from the perspective of the Fed, and it will need to be backed by a lot more over the coming months, but it's a start."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Also on the economic calendar was data from the Federal Reserve, which showed industrial production fell by a wider-than-expected 0.6% in October. Manufacturing output was down 0.7%.
"Much of this decline was due to a 10% drop in the output of motor vehicles and parts that was affected by strikes at several major manufacturers of motor vehicles – the index for manufacturing excluding motor vehicles and parts edged up 0.1%," stated the report.
Factory struggles are likely to continue, says Priscilla Thiagamoorthy, senior economist at BMO Capital Markets, as recent Fed surveys underscore weak momentum. "Elevated borrowing costs are likely to undercut consumer demand and business investment, weighing on factory output," the economist adds.
Cisco sinks after earnings
As for today's earnings news, Cisco Systems (CSCO) plunged 9.8% after the company disclosed its fiscal first-quarter results. While the network equipment specialist beat on the top and bottom lines, it gave weaker-than-expected fiscal second-quarter guidance and lowered its full-year forecast.
"After three quarters of exceptionally strong product delivery, our customers are now focused on installing and implementing these unprecedented levels of products," said Chuck Robbins, CEO of Cisco, in the company's earnings call. "Simply put, customers are now taking time to onboard and deploy these heightened product deliveries," which is creating a slowdown in new orders.
Walmart stock sheds $37 billion in market value
Walmart (WMT) was another Dow Jones stock that plummeted after earnings. The discount retailer's third-quarter results were more than analysts were expecting, while customer transactions and the average ticket were both higher on a year-over-year basis. WMT also said global e-commerce sales surged 15%.
Nevertheless, Walmart stock fell 8.1% – erasing $37 billion in market value – following a cautious forecast. Specifically, Walmart is anticipating full-year earnings per share of $6.40 to $6.48 vs analysts' estimate for earnings of $6.48 per share. The company is also expecting revenue to grow between 5% to 5.5%, while analysts anticipate 5.1% top-line growth.
Weakness in these two blue chip stocks had the Dow Jones Industrial Average lagging its peers, with the 30-stock average closing down 0.1% at 34,945. The S&P 500 (+0.1% to 4,508) and the Nasdaq Composite (+0.07% at 14,113) finished the day with marginal gains.
Related content
- When Is the Next CPI Report?
- Kiplinger's Earnings Calendar for This Week (Nov. 13-17)
- Need Your Lawn Mowed? Uber May Soon Offer Help With That
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical TensionThe main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
-
What's at Stake for Alphabet as DOJ Eyes Google's ChromeAlphabet is higher Tuesday even as antitrust officials at the DOJ support forcing Google to sell its popular web browser. Here's what you need to know.
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical Tension
The main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
-
Why Walmart Stock's a Buy After Its Beat-And-Raise QuarterWalmart is the best Dow Jones stock Tuesday after the retail giant's solid earnings report and outlook and Wall Street thinks it's just getting started. Here's what they're saying.
-
Stock Market Today: Nasdaq Jumps Ahead of Nvidia EarningsIt was a mostly positive start to a new week of pricing in more Donald Trump.
-
Stock Market Today: Stocks Drop as Post-Election Party EndsIt was a red finish on Wall Street Friday with tech stocks selling off ahead of Nvidia's upcoming earnings event.
-
Stock Market Today: Stocks Slip After Powell Talks Rate CutsThe main indexes closed lower Thursday after Fed Chair Powell said there's no rush to cut rates.
-
Cisco Stock: Why Wall Street Is Bullish After EarningsCisco stock is lower Thursday despite the tech giant's beat-and-raise quarter, but analysts aren't concerned. Here's what you need to know.
-
Stock Market Today: Markets Waver as Inflation Continues to EaseStocks gave up early gains as waning consumer price inflation leaves rate-cut bets essentially unchanged.
-
Stock Market Today: Stocks Retreat on Renewed Inflation, Interest Rate QuestionsStocks were lower and yields were higher on Tuesday, with markets reflecting the uncertain transition from campaign promises to real-world policies.
