Thursday's trading session may have been the most glaring example of just how powerful the bull market in U.S. stocks is right now. Even though all of the major averages closed slightly lower on the day, the U.S. market was able to shrug off a global rout in stock prices that began with a 7.3 percent crash in the Nikkei.
The catalyst for the sell-off in Japan centered on concerns about a slowing Chinese economy after a purchasing managers index contracted in May. Despite the steep sell-off in the Nikkei, the country's equity market is still up nearly 40 percent in 2013 after the Bank of Japan launched a massive stimulus program to fight deflation.
In addition to the plunging Nikkei, losses rippled throughout much of the world, with the exception of the United States. The Hang Seng lost 2.54 percent and the major European equity indices were all down a little more than 2 percent on the day.
Major Averages
The Dow Jones Industrial Average lost a little less than 13 points, or 0.08 percent, to 15,294.
The S&P 500 fell around 5 points, or 0.29 percent, to close just above 1,650.
The Nasdaq lost roughly 4 points, or 0.11 percent, to 3,459.
Jobless Claims
The initial claims level fell to 340,000 for the week ending May 18 compared to an upwardly revised 363,000 for the week ending May 11. This came in better than the consensus expected, with estimates for initial jobless claims pegged at 348,000.
Continuing claims fell from 3.024 million for the week ending May 4 to 2.192 million for the week ending May 11. This compared to consensus expectations calling for a decline to 3.005 million.
New Home Sales
New construction home sales rose 2.3 percent in April to 454,000. This compared to sales of 444,000 in March and came in well ahead of consensus estimates calling for new home sales of 425,000 for April. Prices for new homes also rose sharply last month, recording a year over year gain of 14.9 percent to $271,600.
Commodities
Energy prices were largely unchanged on the day. Late in the trading session, NYMEX crude futures, the U.S. benchmark, were flat at $94.28. Brent crude contracts had lost 0.08 percent to $102.52. Natural gas futures were last trading up almost 2 percent on the day to $4.26.
The heavy losses in Japan helped the gold market on Thursday. At last check, COMEX gold futures had risen 1.65 percent to $1,390.00. Silver contracts had last risen by 0.53 percent and were trading at $22.59. Copper futures fell on worldwide risk aversion and were last down around 1.73 percent.
The grain complex was mostly higher on Thursday. Late in the day, corn futures had risen 0.53 percent while wheat was up more than 2 percent. In soft commodities, coffee was down around 1.25 percent while cocoa prices lost nearly 1.50 percent. Overall, volatility was limited in softs.
Bonds
Near the close of the stock market, the iShares Barclays 20+ Year Treasury Bond ETF (TLT) was up 0.53 percent to $116.71. The rise in prices pushed yields lower on the day with the exception of the 2-Year Note yield which was unchanged at 0.24 percent.
The 5-Year Note yield fell one basis point to 0.89 percent. The yield on the 10-Year Note lost two basis points to 2.02 percent and the 30-Year Bond yield fell three basis points to 3.19 percent.
Currencies
The U.S. dollar was weaker on the day. Near the close of equities, the PowerShares DB US Dollar Index Bullish ETF (UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was down 0.66 percent to $22.74.
The closely watched EUR/USD pair jumped 0.83 percent to $1.2932. Despite the volatility in the Japanese stock market, the USD/JPY only fell 0.59 percent on the session. The only other significant mover on the day was the GBP/USD, which fell 0.68 percent.
Volatility and Volume
Despite volatility in global markets, the VIX was only up marginally on Thursday. The widely watched barometer of market fear was trading up around 2.60 percent to 14.17 late in the day.
Volume was heavier than normal for the second straight day on Thursday. Around 187.6 million SPDR S&P 500 ETF (SPY) shares traded hands on the session compared to a 3-month daily average of 125 million.
Stock MoversShares of Lender Processing Services (LPS) were up around 12 percent late on Thursday after reports indicated the company was close to being acquired by Fidelity National Financial (FNF) and Thomas H. Lee Partners for around $2.9 billion. Fidelity National Financial had gained a little less than 6 percent on the buyout news.The iShares MSCI Japan ETF (EWJ) lost more than 4 percent on the day after the rout in the Nikkei.Pacific Sunwear of California (PSUN) climbed more than 11 percent after the company released better than expected Q1 results.Retailer rue21 (RUE) rose almost 23 percent after agreeing to be acquired by Apax Partners for around $1.1 billion.Chip-maker Cirrus Logic (CRUS) was trading down more than 19 percent late on Thursday after the company guided for lower gross margin in an investor presentation. Cirrus Logic also said that revenue for the fiscal year is likely to be affected by an expected decline in average selling prices.Hewlett-Packard (HPQ) surged around 17 percent after the company's fiscal first-quarter financial results.Shares of MEMC Electronic Materials (WFR) jumped almost 11 percent on Thursday. The stock has been the subject of insider buying in recent days and also saw bullish options trading activity on the session.Biotech name MannKind (MNKD) climbed for the second straight day on buyout speculation. The stock closed up almost 10 percent higher on the session.A host of Japanese ADRs plunged on Thursday. Kyocera (KYO) lost more than 7 percent. Konami (KNM) fell almost 8 percent and Nomura Holdings (NMR) shed 7 percent.
BY Scott Rubin
The catalyst for the sell-off in Japan centered on concerns about a slowing Chinese economy after a purchasing managers index contracted in May. Despite the steep sell-off in the Nikkei, the country's equity market is still up nearly 40 percent in 2013 after the Bank of Japan launched a massive stimulus program to fight deflation.
In addition to the plunging Nikkei, losses rippled throughout much of the world, with the exception of the United States. The Hang Seng lost 2.54 percent and the major European equity indices were all down a little more than 2 percent on the day.
Major Averages
The Dow Jones Industrial Average lost a little less than 13 points, or 0.08 percent, to 15,294.
The S&P 500 fell around 5 points, or 0.29 percent, to close just above 1,650.
The Nasdaq lost roughly 4 points, or 0.11 percent, to 3,459.
Jobless Claims
The initial claims level fell to 340,000 for the week ending May 18 compared to an upwardly revised 363,000 for the week ending May 11. This came in better than the consensus expected, with estimates for initial jobless claims pegged at 348,000.
Continuing claims fell from 3.024 million for the week ending May 4 to 2.192 million for the week ending May 11. This compared to consensus expectations calling for a decline to 3.005 million.
New Home Sales
New construction home sales rose 2.3 percent in April to 454,000. This compared to sales of 444,000 in March and came in well ahead of consensus estimates calling for new home sales of 425,000 for April. Prices for new homes also rose sharply last month, recording a year over year gain of 14.9 percent to $271,600.
Commodities
Energy prices were largely unchanged on the day. Late in the trading session, NYMEX crude futures, the U.S. benchmark, were flat at $94.28. Brent crude contracts had lost 0.08 percent to $102.52. Natural gas futures were last trading up almost 2 percent on the day to $4.26.
The heavy losses in Japan helped the gold market on Thursday. At last check, COMEX gold futures had risen 1.65 percent to $1,390.00. Silver contracts had last risen by 0.53 percent and were trading at $22.59. Copper futures fell on worldwide risk aversion and were last down around 1.73 percent.
The grain complex was mostly higher on Thursday. Late in the day, corn futures had risen 0.53 percent while wheat was up more than 2 percent. In soft commodities, coffee was down around 1.25 percent while cocoa prices lost nearly 1.50 percent. Overall, volatility was limited in softs.
Bonds
Near the close of the stock market, the iShares Barclays 20+ Year Treasury Bond ETF (TLT) was up 0.53 percent to $116.71. The rise in prices pushed yields lower on the day with the exception of the 2-Year Note yield which was unchanged at 0.24 percent.
The 5-Year Note yield fell one basis point to 0.89 percent. The yield on the 10-Year Note lost two basis points to 2.02 percent and the 30-Year Bond yield fell three basis points to 3.19 percent.
Currencies
The U.S. dollar was weaker on the day. Near the close of equities, the PowerShares DB US Dollar Index Bullish ETF (UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was down 0.66 percent to $22.74.
The closely watched EUR/USD pair jumped 0.83 percent to $1.2932. Despite the volatility in the Japanese stock market, the USD/JPY only fell 0.59 percent on the session. The only other significant mover on the day was the GBP/USD, which fell 0.68 percent.
Volatility and Volume
Despite volatility in global markets, the VIX was only up marginally on Thursday. The widely watched barometer of market fear was trading up around 2.60 percent to 14.17 late in the day.
Volume was heavier than normal for the second straight day on Thursday. Around 187.6 million SPDR S&P 500 ETF (SPY) shares traded hands on the session compared to a 3-month daily average of 125 million.
Stock MoversShares of Lender Processing Services (LPS) were up around 12 percent late on Thursday after reports indicated the company was close to being acquired by Fidelity National Financial (FNF) and Thomas H. Lee Partners for around $2.9 billion. Fidelity National Financial had gained a little less than 6 percent on the buyout news.The iShares MSCI Japan ETF (EWJ) lost more than 4 percent on the day after the rout in the Nikkei.Pacific Sunwear of California (PSUN) climbed more than 11 percent after the company released better than expected Q1 results.Retailer rue21 (RUE) rose almost 23 percent after agreeing to be acquired by Apax Partners for around $1.1 billion.Chip-maker Cirrus Logic (CRUS) was trading down more than 19 percent late on Thursday after the company guided for lower gross margin in an investor presentation. Cirrus Logic also said that revenue for the fiscal year is likely to be affected by an expected decline in average selling prices.Hewlett-Packard (HPQ) surged around 17 percent after the company's fiscal first-quarter financial results.Shares of MEMC Electronic Materials (WFR) jumped almost 11 percent on Thursday. The stock has been the subject of insider buying in recent days and also saw bullish options trading activity on the session.Biotech name MannKind (MNKD) climbed for the second straight day on buyout speculation. The stock closed up almost 10 percent higher on the session.A host of Japanese ADRs plunged on Thursday. Kyocera (KYO) lost more than 7 percent. Konami (KNM) fell almost 8 percent and Nomura Holdings (NMR) shed 7 percent.
BY Scott Rubin