Following the mixed performance seen in the previous session, stocks saw modest weakness during trading on Thursday. With the drop on the day, the Dow and the S&P 500 pulled back off yesterday’s record closing highs.
The major averages all ended the day in negative territory. The Dow dipped 53.36 points or 0.2 percent to 22,359.23, the Nasdaq slid 33.35 points or 0.5 percent to 6,422.69 and the S&P 500 fell 7.64 points or 0.3 percent to 2,500.60.
The modest weakness on Wall Street came as traders continued to digest the Federal Reserve’s monetary policy announcement on Wednesday, when the Fed left interest rates unchanged but signaled another rate hike is likely this year.
The Fed’s projections pointed to a quarter basis point rate increase later this year, with the rate hike widely expected to come at the December meeting.
The central bank also revealed that it will begin shrinking its $4.5 trillion balance sheet in October, initially allowing $10 billion in bonds to roll off each month.
In her subsequent press conference, Fed Chair Janet Yellen said the process of winding down the balance sheet would be gradual and predictable.
On the U.S. economic front, the Labor Department released a report showing an unexpected decrease in initial jobless claims in the week ended September 16th.
The report said initial jobless claims fell to 259,000, a decrease of 23,000 from the previous week’s revised level of 282,000.
The continued decrease surprised economists, who had expected jobless claims to climb to 300,000 from the 284,000 originally reported for the previous week.
A separate report released by the Philadelphia Federal Reserve showed an unexpected improvement in regional manufacturing conditions in the month of September.
The Philly Fed said its index for current manufacturing activity rose to 23.8 in September from 18.9 in August, with a positive reading indicating growth. Economists had expected the index to drop to 17.2.
The Conference Board also released a report showing a bigger than expected increase by its index of leading economic indicators.
Steel stocks showed a significant move to the downside on the day, dragging the NYSE Arca Steel Index down by 1.9 percent. The index ended the session at its lowest closing level in nearly a month.
Olympic Steel (ZEUS), U.S. Steel (X) and Brazil’s CSN (SID) turned in some of the steel sector’s worst performances on the day.
Considerable weakness was also visible among oil service stocks, as reflected by the…