Traders work on the floor of the New York Stock Exchange.
U.S. stocks traded mixed on Thursday, but both the Dow Jones Industrial Average and S&P 500 managed to notch intraday records as investors weighed hot inflation readings but improved jobless claims data.
Among the S&P sectors, health care and tech outperformed with gains of 0.8% and 0.6%, respectively, while energy, industrials and materials stocks lagged. Salesforce and Apple were the best-performing stocks in the Dow while Home Depot shaved off about 20 points.
“Despite the relatively placid surface, there are some more gyrations under the surface of the S&P 500 today,” Goldman Sachs equity strategists wrote on Thursday.
“Industrials, Materials, and Energy all led the S&P 500 through the last few sessions, supported in parted by the hopes for increased infrastructure spending, but are now the worst performers today,” Goldman added. “Conversely, we’re seeing a rotation back into long duration stocks, including Tech, Healthcare, and Comm Services.”
The Labor Department reported Thursday morning that initial jobless claims declined slightly last week as the U.S. labor market continues its recovery from last year’s recession. There were 375,000 claims last week, matching estimates. The prior reading came in at 385,000 claims.
The prices U.S. manufacturers and other businesses pay for labor, raw materials and other goods rose again in July. The government said its producer price index, excluding volatile food, trade services and energy components, rose 0.9% last month versus a forecast for a 0.5% gain.
The update to producer price inflation came a day after the Labor Department said consumer prices surged 5.4% from a year earlier, for the month of July, and 0.5% from the previous month. Core inflation, however, rose by just 0.3% in July, below the 0.4% increase forecast.
“Inflation has, at a minimum, paused,” said Brad McMillan, chief investment officer at Commonwealth Financial Network. “For both the headline and core figures, the monthly and annual numbers were stable or down from last month. Based on that data, inflation is certainly not on an unstoppable increase.”
“The inflation story is more about isolated components, rather than general increases in prices, and even those components are showing signs of peaking,” he added. “As we dig into the numbers, inflation is above where it has been but is showing signs of rolling over and returning to more comfortable levels.”
Dow member Disney will report earnings after the closing bell. The shares, down slightly in 2021, were up 0.6% during Thursday’s regular session. Micron shares fell 6% after Morgan Stanley predicted a slowdown in the memory chip market and downgraded the stock.
On Wednesday, the Dow gained 0.6% to reach 35,484.97 and close at a new record. The S&P 500 rose 0.2% to an all-time high of 4,447.70. The Nasdaq Composite traded about 0.1% lower to 14,765.13.
— CNBC’s Michael Bloom contributed reporting.