Stocks went nowhere as the major equity indexes were little changed for the second straight day, though the Dow did lead losses as American Express and Wal-Mart shares declined bringing the blue chip index back below 18,000.
First, the scoreboard:
- Dow: 17,986.5, -43.3, (-0.2%)
- S&P 500: 2,097.5, -2.2, (-0.1%)
- Nasdaq: 4,924.7, +18.3, (+0.4%)
And now, the top stories on Thursday:
1. The big news on Thursday came from American’s biggest retailer: Wal-Mart. The company reported fourth quarter earnings per share of $US1.61, which beat expectations, while revenues came in a bit light at $US131.6 billion. The big news out of the company’s announcement was news that it would give raises to 500,000 hourly employees, raising the minimum wage across Wal-Mart stores to $US9 an hour in April and $US10 an hour by February 2016. Wal-Mart shares finished Thursday down about 3%.
2. American Express had more bad news on Thursday, as a court ruled that the company violated antitrust laws by barring businesses from asking customers to use lower-cost credit cards. American Express said it would file an appeal of the ruling. This news comes after last week AmEx announced that it would end its co-branding agreement with Costco, and as the bad news adds up for AmEx, Business Insider’s Shane Ferro asks if it might be time to think about breaking up with American Express. American Express shares lost around 1.7% on Thursday.
3. The latest news out of Europe on Thursday saw Germany reject Greece’s latest proposal on a six-month loan extension. Leaked documents indicated that Germany’s rejection hung on the question of whether Greece would be agreeing to an extension under the terms of the current bailout program or an altogether different package.
4. On the economic data front, the weekly report on initial jobless claims came in better than expected, with claims falling to 283,000 last week, down from 304,000 the prior week and below expectations for 290,000. In a note to clients following the report, Jesse Hurwitz at Barclays said the report reflects continued labour market. It is also worth nothing that this latest report was from the reference week that the BLS will use in forming its February nonfarm payrolls report.
5. The latest manufacturing report from the Philadelphia Federal Reserve declined to 5.2 from 6.3 in January. This report also missed expectations for a reading of 9. In a realease, the Philly Fed said, “Although the current activity index fell for the third consecutive month, it remained positive, and the employment indicator increased from its reading last month.”
6. Bond king Jeff Gundlach does not have a positive outlook on automakers over the long term, and his thesis seems somewhat related to a recent change in his life: Gundlach doesn’t really drive much anymore.
7. Oil prices were volatile on Thursday, falling late Wednesday and into early Thursday after inventory data from the API surged, before reversing higher during the day on Thursday. In a note on Thursday afternoon, the NYSE’s Rich Barry wrote: “Crude oil and stocks. We do not know the reason why, but for some strange reason, crude oil and the Dow Jones Industrial Average have traded almost in lock-step today – which is not a good thing when you take into consideration how volatile the price of crude has been over the past several months. (When crude came off the morning lows, so did stocks.) As further proof of this strange relationship-trade, Art Cashin just hit me with a note: ‘Crude eases a bit and the Dow follows like a smitten teenager.'”