Dow Reaches New Record High But Nasdaq, S&P 500 Close Lower - U.S. Commentary

(RTTNews) - After moving in opposite directions early in the session, the major averages remained mixed throughout the trading day on Thursday. The Dow climbed to a new record closing high, while the broader Nasdaq and S&P 500 spent most of the day in negative territory.

While the Dow rose 45.30 points or 0.2 percent to 22,203.48, the Nasdaq slid 31.10 points or 0.5 percent to 6,429.08 and the S&P 500 edged down 2.75 points or 0.1 percent to 2,495.62.

The pullback by the Nasdaq and the S&P 500 came following the release of a Labor Department report showing a bigger than expected increase in consumer prices in the month of August.

The Labor Department said its consumer price index climbed by 0.4 percent in August after inching up by 0.1 percent in July. Economists had expected consumer prices to rise by 0.3 percent.

Excluding food and energy prices, the core consumer price index rose by 0.2 percent in August following a 0.1 percent uptick in the previous month. The increase in core prices matched economist estimates.

The annual rate of growth in consumer prices accelerated to 1.9 percent in August from 1.7 percent in July, although the annual growth in core consumer was prices was unchanged at 1.7 percent.

The faster rate of consumer price growth has raised some concerns about the outlook for the Federal Reserve's monetary policy.

A separate report from the Labor Department showed an unexpected pullback in initial jobless claims in the week ended September 9th.

The report said initial jobless claims fell to 284,000, a decrease of 14,000 from the previous week's unrevised level of 298,000. The drop surprised economists, who had expected jobless claims to inch up to 300,000.

Geopolitical concerns also generated some selling pressure after North Korea threatened to use nuclear weapons to "sink" Japan and reduce the U.S. to "ashes and darkness" for supporting a new round of sanctions by the United Nations.

Meanwhile, the Dow is benefiting from notable gains by United Technologies (UTX), Pfizer (PFE) and Merck (MRK). Boeing (BA) also moved higher after announcing plans to raise production of its 787 Dreamliner in 2019.

Sector News

Most of the major sectors showed only modest moves on the day, contributing to the lackluster close by the broader markets.

Steel stocks saw substantial weakness, however, dragging the NYSE Arca Steel Index down by 1.5 percent. The weakness in the sector came as disappointing Chinese economic data raised concerns about the outlook for demand.

Considerable weakness was also visible among trucking and telecom stocks, with the Dow Jones Trucking Index and the NYSE Arca North American Telecom Index sliding by 1.2 percent and 1.1 percent, respectively.

On the other hand, natural gas stocks saw significant strength, driving the NYSE Arca Natural Gas Index up by 1.9 percent. The strength in the sector came amid an increase in energy prices.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Thursday. Japan's Nikkei 225 Index dipped by 0.3 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the French CAC 40 Index crept up by 0.2 percent, the German DAX Index edged down by 0.1 percent and the U.K.'s FTSE 100 Index tumbled by 1.1 percent.

In the bond market, treasuries showed a lack of direction for much of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 2.197 percent.

Looking Ahead

Trading on Friday is likely to be impacted by reaction to a slew of U.S. economic data, including reports on retail sales, industrial production, and consumer sentiment.