Stocks Close Moderately Lower, But Well Off Session Lows

Stocks settled moderately lower on Thursday, though well off their worst levels of the day as investors used late afternoon weakness as an opportunity to continue investing idle cash.

The Dow Jones Industrial Average (^DJI) at 25,850 -103; S&P 500 at 2774.88 – 9.82; and NASDAQ Composite (^IXIC) at 7459.71 – 29.36 all posted declines of just less than -0.5%, with the NASDAQ breaking an 8 session winning streak.

Market internals remain steady with declining issues leading advancers by slightly less than 3 to 2 and Down Volume running ahead of Up Volume by 2 to 1.

There was some well deserved profit taking in Oils, Industrials, and Materials; as well as a few news driven high profile decliners, Alphabet (GOOG), 1096.88, – $17 from ad cancellations at YouTube, Nike Inc. (NKE), $84.00 – $0.84, from “the Shoe” incident, and Johnson & Johnson (JNJ) $135.11 -$1.24, on a lawsuit over their baby powder line.

Economic data delivered both positives and negatives.

Weekly jobless claims beat consensus of 225,000, declining to 216,000 from a shutdown induced bump of 239,000 the prior week.

December Durable goods gave us a headline number of +1.2, smoothed to +0.1 without the volatile transportation component. Given this was a December number it cancels out some of the gloom and doom mantra on the manufacturing economy that we we bombarded with toward the end of the year.

The Philly FED manufacturing survey registered -4.1, well below consensus of +12 – +14. Definitely a disappointment, with the caveat that the regional FED surveys have a history of volatile swings.

Existing Home Sales for January came in at 4.94 Million, below consensus of 5.05 million, and the lowest monthly reading since 2015. Keep in mind this registers sales that closed in January, which means they likely went to contract in November or December.

Since then mortgage rates have followed bond yields lower, and earlier in the week there was a rare uptick in the NAHB Housing Market Index.

All in all, todays decline was anything but a rout, and the last hour indicator remains positive. We’ll take a look at near term support level for the market averages on any further weakness.