Dow Plunges Over 500 Points Following Unexpected Surge In US Jobless Claims

Health care stocks were retreating late Thursday afternoon, with the NYSE Health Care Index falling 2.5% and the Health Care Select Sector SPDR Fund (XLV) dropping 2.3%.

The iShares Biotechnology ETF (IBB) shed 1.7%.

In corporate news, Cassava Sciences shares jumped 5.1% after the Delaware Court of Chancery scheduled a hearing to dismiss a lawsuit against the company's officers.

Silo Pharma shares surged 57% as it said Thursday it entered into a device and development master plan with medical technology provider Resyca.

Abbott Laboratories reported bigger-than-expected increases in Q2 results amid revenue growth in medical device and nutrition, and the company raised its full-year earnings forecast. The shares fell 4.5%.

Agenus shares plunged nearly 59% after the US Food and Drug Administration advised against an accelerated approval pathway for the company's potential colorectal cancer combination treatment.

U.S. stocks traded lower toward the end of trading, with the Nasdaq Composite falling more than 100 points on Thursday.

The Dow traded down 1.08% to 40,752.05 while the NASDAQ fell 0.80% to 17,853.34. The S&P 500 also fell, dropping, 0.75% to 5,546.48.

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Leading and Lagging Sectors

Energy shares jumped by 1.1% on Thursday.

In trading on Thursday, health care shares fell by 1.6%.

Top Headline

Abbott Laboratories reported better-than-expected earnings for its second quarter on Thursday.

The company posted sales of $10.38 billion, up 4%, almost in line with the consensus of $10.37 billion. Abbott's adjusted diluted earnings per share was $1.14, beating the analyst estimates of $1.10.

Abbott said it projects full-year 2024 GAAP EPS of $3.30-$3.40 versus prior guidance of $3.25-$3.40, primarily related to intangible amortization, restructuring and cost reduction initiatives and other net expenses. The company forecasts adjusted EPS of $4.61-$4.71 versus the prior guidance of $4.55-$4.70 and consensus of $4.63.

Equities Trading UP

• CommScope Holding Company, Inc. shares shot up 9% to $1.87. Amphenol announced plans to acquire mobile networks businesses from CommScope.
• Shares of Silo Pharma, Inc. got a boost, surging 60% to $3.60. Silo Pharma said it has entered into a Device and CMC Development Master Plan with Resyca BV, a medical technology provider.
• Chuy’s Holdings, Inc. shares were also up, gaining 48% to $37.33 after Darden Restaurants announced it will acquire the company.

Equities Trading DOWN

• Agenus Inc. shares dropped 56% to $7.85 after the company announced the FDA discouraged an accelerated approval pathway at the end-of-Phase 2 meeting.
• Shares of Leslie’s, Inc. were down 32% to $2.7850 after the company reported preliminary financial results for the third quarter and cut its full-year guidance. Multiple analysts also lowered price targets on the stock Thursday morning.
• Torrid Holdings Inc. was down, falling 16% to $7.24 after Morgan Stanley downgraded the stock from Equal-Weight to Underweight and maintained its $5 price target.

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Commodities

In commodity news, oil traded up 0.5% to $83.23 while gold traded down 0.1% at $2,458.60.

Silver traded down 0.5% to $30.225 on Thursday, while copper fell 2.9% to $4.2815.

Euro zone

European shares closed mixed today. The eurozone's STOXX 600 fell 0.16%, Germany's DAX fell 0.45% and France's CAC 40 rose 0.21%. Spain's IBEX 35 Index rose 0.38%, while London's FTSE 100 rose 0.21%.

Construction output in the Eurozone fell 2.4% year-over-year in May compared to a revised 1.5% decline in the prior month. Passenger car registrations in the European Union climbed 4.3% year-over-year to 1.1 million units in June.

Regular pay in the U.K., excluding bonus payment, rose 5.7% year-over-year to GBP 643/week during the three months to May, while the unemployment rate came in unchanged at 4.4% from March to May.

Asia Pacific Markets

Asian markets closed mixed on Thursday, with Japan's Nikkei 225 dipping 2.36%, Hong Kong's Hang Seng Index gaining 0.22%, China's Shanghai Composite Index gaining 0.48% and India's S&P BSE Sensex climbing 0.78%.

Hong Kong’s unemployment rate came in unchanged at 3% during the three months ending June. Japan reported a trade surplus of JPY 224.04 billion in June, compared to market views for a deficit of JPY 240 billion.

Economics

• U.S. initial jobless claims increased by 10,000 to 243,000 in the week ending July 13, compared to market estimates of 230,000.
• The Philadelphia Fed Manufacturing Index rose to 13.9 in July, recording the strongest level in three months, versus 1.3 in June.
• The EIA said U.S. natural gas stocks rose by 10 billion cubic feet in the week ended July 12, compared to market estimates of a 28 billion cubic feet gain.

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It’s another risk-off day on Wall Street, with all major U.S. indices trading in the red. The CBOE Volatility Index (VIX), often referred to as the market’s fear gauge, spiked over 10%, reaching levels last seen in late April.

Both the S&P 500 and the Nasdaq 100 indices declined by 0.6%, while the Dow Jones Industrial Average fell 0.7%, potentially ending a streak of six consecutive positive sessions.

Small-cap stocks also succumbed to the broader negative sentiment, with the Russell 2000 index dropping 0.7%.

Chicago Fed President Austan Goolsbee, a known “dove” on the board, expressed optimism about progress on inflation and the U.S. economy’s resilience in avoiding a recession. He did not commit to a potential rate cut in September.

Following Wednesday’s sell-off triggered by concerns over increased U.S. chip export restrictions to China, semiconductor stocks remained broadly weaker, with the iShares Semiconductor ETF down by 0.6%. Despite this, Nvidia Corp. defied the trend, rising 1.8%.

Significant volatility erupted in the health care sector, particularly within the weight loss drug industry. The market duopoly of Eli Lilly and Company and Novo Nordisk A/S face heightened competitive threats from Pfizer Inc. and Roche Holding Ltd , both of which recently announced developments to enter this lucrative market.

Shares of Eli Lilly plunged 5.6%, marking their worst session since mid-March 2021, while Novo Nordisk shares dropped 5%, their worst performance since August 2022.

On the economic data front, jobless claims rose more than expected last week and continuing claims reached their highest level since November 2021, indicating a cooling trend in the labor market.

The U.S. dollar acted as a safe haven, rising 0.3%, while Treasury yields inched higher across the curve. The European Central Bank kept interest rates unchanged, as expected, keeping the door open for September.

In commodities, growth-sensitive copper tumbled over 3%, hitting its lowest level since mid-April. Silver eased by 0.9% and gold remained flat. Oil prices slipped 0.3%, while natural gas surged over 4%, nearly recouping Wednesday’s sharp losses following a weaker-than-expected buildup in inventories last week.

Bitcoin edged 0.4% lower, eyeing a second consecutive negative close.

Thursday’s Performance In Major US Indices, ETFs

According to Benzinga pro data:

• The SPDR S&P 500 ETF Trust  was 0.6% lower to $553.74.
• The SPDR Dow Jones Industrial Average  fell by 0.7% to $409.10.
• The tech-heavy Invesco QQQ Trust  fell 0.5% to $479.14.
• Sector-wise, the Energy Select Sector SPDR Fund  outperformed, up by 1%, while the Health Care Select Sector SPDR Fund  lagged, down 1.5%.

Thursday’s Market Movers

• Taiwan Semiconductor Manufacturing Company Ltd. fell 0.9% despite reporting stronger-than-expected results last quarter.
• Other stocks reacting to corporate earnings were Abbott Laboratories , down 3.5%, Alcoa Corporation , down 1%, SL Green Realty Corp. down 2.5%, Kinder Morgan, Inc. , up 3.8%, Domino’s Pizza, Inc. , down 13%, Blackstone Inc. , up 2.6%, Marsh & McLennan Companies, Inc. , down 1%, Alaska Air Group, Inc. , down over 5%, Cintas Corp. , up over 6%, D.R. Horton, Inc. , up 13%, Virtu Financial Inc. , up 18% and Novartis AG , down 4.4%.
• Companies reporting after the close include Netflix, Inc. and Intuitive Surgical, Inc. .

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