Equity markets traded in a narrow range on Thursday, with gains in the tech sector helping the Standard & Poor’s 500 and Nasdaq finish modestly higher, while the Dow Jones Industrial Average shed 60 points.
This continued a string of rather modest moves this week, which have seen stocks touch fresh highs.
Consumer discretionary and technology sectors were outperformers, driven by solid earnings reports from companies within those industries.
Meanwhile, 10-year Treasury yields ticked down slightly, closing below the 1.6 percent mark.
On the economic front, initial jobless claims showed a very slight decline from last week, reaching the lowest level since the pandemic began.
Jobless claims have been cut in half since April, consistent with the healthy decline in the unemployment rate.
At the same time, the pace of labor-market improvement has waned a bit in recent months.
Edward Jones analysts think job growth will see some renewed momentum as we move into 2022, supporting a lift in gross domestic product growth from the most recent third-quarter reading.
In retail earnings, quarterly results from Macy’s and Kohl’s out Thursday exceeded both sales and profit expectations, adding to the string of strong announcements this week from the country’s large retailers.
This aligns with the healthy consumer-demand backdrop that has been blunted recently by supply-chain disruptions.
Nevertheless consumer spending growth is expected to pick up next year, forming the backbone for a sustained economic expansion.
In Washington, negotiations continue over President Joe Biden’s BBB spending bill, which has met resistance from Republicans and moderates amid rising deficit worries.
On that front, Senate leaders appear to be in preliminary talks to address the approaching debt ceiling, which Treasury Secretary Yellen noted this week will be reached by mid-December.
Analysts expect another bout of brinkmanship around the debt limit but think the chances of U.S. default are low.
Given the timing of the BBB bill and the debt ceiling, analysts suspect negotiations in Congress will attempt to connect the two as each party seeks concessions.