The three main stock indexes traded little changed during much of the session on Thursday as crude oil rallied out of a bear market.
First, the scoreboard:
- Dow: 18,596.50, +22.56, (0.12%)
- S&P 500: 2,186.90, +4.68, (0.21%)
- Nasdaq: 5,240.15, +11.49, (0.22%)
- WTI crude oil: $48.17, +1.38, (+2.95%)
- Prison stocks crashed. The Department of Justice is phasing out contracting to privately run prisons, according to a memo. After this news crossed, shares of Corrections Corporation of America, the largest publicly traded prison provider, fell in half, while Geo Group fell by more than 40%. Trading in both shares was halted for volatility. Private prisons are less secure than those run by the Federal Bureau of Prisons, the DOJ said.
- Walmart beat and raised. The world’s No. 1 brick-and-mortar retailer reported second-quarter adjusted earnings per share of $1.07 ($10.2 estimated), revenue of $120.9 billion ($120.3 billion estimated), and raised its outlook for full-year EPS. Sales at stores open for at least one year were positive for a seventh straight quarter.
- T. Rowe Price is suing Valeant Pharmaceuticals, alleging fraud. The mutual fund, which invests in the company, alleges that Valeant is running a “fraudulent scheme” through its now shuttered pharmacy, Philidor. Valeant said it has not yet been served the suit.
- Crude oil is back in a bull market. West Texas Intermediate crude futures in New York closed up 22% from the recent bottom on August 2, when they slipped below $40 per barrel. Oil has gained in every session since August 11 as reports of talks towards a production-freeze agreement among OPEC producers were revived.
- In economic data, initial jobless claims fell more than expected last week, by 4,000 to 262,000. Claims have now been below 300,000 for 76 straight weeks — the longest stretch since 1970. And, the Philly Fed manufacturing index rose in August to 2 from -2.9 in July. But indicators of employment and new orders showed continued weakness in the region.