Stocks gave up a strong open quite quickly on Thursday morning, and then rebounded, but closed nearly flat. West Texas Intermediate crude also reversed a 4% rally. We got more ugly data on manufacturing in America.
First, the scoreboard:
- Dow: 16,231.12, -53.58, (-0.33%)
- S&P 500: 1,917.92, -2.11, (-0.11%)
- Nasdaq: 4,608.66, -11.50, (-0.25%)
And now, the top stories on Thursday:
- US auto sales climbed to a new 10-year high in September. According to Autodata, sales rose at an annualized pace of 18.17 million (17.6 million estimated). Mitsubishi North America saw a massive gain (+35.9), and helped by strong retail results, Ford sales rose 23%.
- We got two more downbeat readings on American manufacturing. Markit Economics’ purchasing manager’s index (PMI) was 53.1, the lowest since March. And, the Institute of Supply Management’s PMI was 50.2%, the worst since May 2013. “The sector is being hammered by the strong dollar, weaker growth in EM export markets, and the rollover in oil firms’ capex,” wrote Pantheon Macroeconomics’ Ian Shepherdson in a client note. “The latter is easing but the first two hits have not yet peaked; manufacturing will weaken further. But it is a small part of the economy, 12% of value added and 9% of employment.”
- Initial jobless claims rose 10,000 to 277,000 last week, according to the Bureau of Labour Statistics. Claims are still near the lowest levels in a decade. The four-week moving average fell 1,000 to 270,750.
- Dunkin’ Brands‘ stock tanked 12% after the company announced sales guidance below analysts’ estimates. On its investor day, it said Dunkin’ Doughnuts and Baskin-Robbins sales at stores open for at least one year, or same-store sales, would grow 1% to 3% in the fiscal year 2015. Analysts had estimated sales of 3.32% and 2.7% for the two brands respectively. The company also announced it plans to close 100 Dunkin’ Doughnuts stores in Speedway gas stations by the end of 2016. Efraim Levy, an analyst at S&P Capital IQ, noted that this would not impede the company’s planned gross store openings in that period.
- Twitter shares fell more than 8% in trading, following a report yesterday that the company could name its permanent CEO as soon as Thursday. Cofounder, Square CEO and interim CEO Jack Dorsey is expected to be announced as the new boss. Twitter shares are trading below the IPO price, and have dropped more than 30% since Dick Costolo resigned in June.
- UBS has cut its outlook for the stock market. In a note Thursday, Julian Emanuel slashed the firm’s year-end target for the S&P 500 to 2,125 from 2,225, citing low rates and an uncertain political climate. Earlier this week, Goldman Sachs and RBC Capital also cut their targets, preceded by Bank of America Merrill Lynch, Credit Suisse and Deutsche Bank.