Stock Market Trades Lower As Investors Keep A Watchful Eye On Ukraine, Higher Jobless Claims

The stock market fell Thursday at midday as investors kept a watchful eye on Russia’s military buildup and as jobless claims came in higher than expected.

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Walmart (WMT) and Cisco Systems (CSCO) rose after both reported earnings. Nvidia (NVDA) slid more than 7% in spite of beating earnings forecasts.

The Nasdaq composite was down 1.5%. The S&P 500 lost 1.2%, and is below its 200-day moving average.

Stock market indexes remain volatile. With direction unclear, IBD’s current market outlook is “uptrend under pressure.”

The Dow Jones Industrial Average fell 1.2%. The small-cap Russell 2000 index fell 1.6%.

Volume rose on the NYSE and fell on the Nasdaq compared with the same time on Wednesday.

Ukraine, Jobless Claims Rock Stock Market

The stock market remains largely focused on Ukraine. Western officials say Russia continues its military buildup in the region, despite stating that it has pulled back some troops. The U.S. envoy to the U.N. said Russia is moving toward an “imminent” invasion of Ukraine.

In economic reports, jobless claims rose to 248,000 in the latest report, from a revised 224,000 the previous week. The new number was well above the 224,000 economists had forecast, according to Econoday.

Bankrate.com Senior Economic Analyst Mark Hamrick said the number of new claims defied expectations for improvement. “Even so, one would not construct a new trend out of one week’s movement, particularly given the generally low level of new claims overall and with unemployment at 4%.” In a bright spot, continuing claims dropped to 1.59 million.

Housing starts in January fell more than 4% to 1.638 million, below the consensus estimate of 1.708 million. Jennifer Lee, Senior Economist at BMO Capital Markets, said a decline was expected but the size of the drop was larger than expected.

The 10-year Treasury yield ticked down below 2% Thursday morning. On Wednesday, the 10-year Treasury yield closed just below 2.05%.

U.S. oil prices slid 2% Thursday, as West Texas Intermediate crude dropped to $91.50 a barrel.

Walmart, Cisco Prop Up A Sagging Stock Market

Walmart early today posted better-than-expected quarterly earnings. The company also gave a relatively upbeat sales forecast and plans to focus on value as consumers grapple with inflation. Shares, which sank to an 11-month low this week, rose 2% in big volume.

Cisco gapped up more than 4% and reclaimed its 200-day line in heavy volume. The networking equipment company beat sales and profit views and raised its sales guidance for the fiscal year ending in July.

The Philadelphia Semiconductor Index fell more than 2% following earnings reports from some key companies in the industry.

Graphics-chip maker Nvidia beat expectations for its January-ended quarter as data-center processor sales boosted results. Nvidia also guided higher for the current quarter.

Nvidia disappointed some investors with its guidance for an unchanged gross profit margin in the first quarter, analysts said.

“We are seeing exceptional demand for Nvidia computing platforms,” Chief Executive Jensen Huang said in a news release. “Nvidia is propelling advances in AI, digital biology, climate sciences, gaming, creative design, autonomous vehicles and robotics — some of today’s most impactful fields.”

The stock has been rebounding off its 200-day moving average.

Chip-equipment maker Applied Materials (AMAT) topped expectations for its January quarter but gave guidance below estimates. The stock climbed at the open but reversed lower. Shares were down 1%.

Christmas Comes Late For Toymaker

Toymaker Hasbro (HAS) leapt 5% as activist investor Alta Fox Capital Management launched a proxy battle for five company board seats. The stock gapped above a buy point of 97.89 from a cup-with-handle pattern.

DoorDash (DASH) stock soared more than 10% Thursday in reaction to the company’s fourth-quarter results, which missed earnings estimates but beat on revenue and came with a first-quarter outlook above expectations. The results were posted late Wednesday.

DoorDash reported an adjusted loss of 45 cents a share on revenue of $1.3 billion. FactSet analysts expected DoorDash to report a loss of 25 cents on revenue of $1.28 billion.

In other earnings, Palantir Technologies (PLTR) on Thursday reported December-quarter earnings that missed estimates while revenue topped Wall Street targets. PLTR stock fell 10% as March quarter revenue guidance edged past expectations.

Palantir had retreated 24% in 2022 heading into the earnings report. Palantir earnings for the three months ending Dec. 31 were 2 cents per share on an adjusted basis. Revenue jumped 34% to $433 million, the maker of data analytics software said. Analysts expected Palantir earnings of 4 cents a share on revenue of $418 million.

IBD 50 Trades Lower

Innovator IBD 50 ETF (FFTY) tumbled 1.3%.

A number of stocks are forming bases. Those include Simply Good Foods (SMPL), Arista Networks (ANET), Mueller Industries (MLI) and Commercial Metals (CMC), which is on Wednesday’s IBD 50 Stock to Watch.

Follow Michael Molinski on Twitter @IMmolinski

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