This is just some steam being let off after an all time high in my humble opinion. So I am expecting a re-bound tomorrow. The Russell 2000 is down 10% from it’s high again, so a bounce is now overdue.
Janet Yellen’s comments after the market close may influence the direction tomorrow on what is a slow day for economic news and earnings reports.
Stocks finished sharply in the red Thursday, with the Dow down triple digits, weighed down by disappointing earnings from a handful of retailers and weak economic reports.
The Dow Jones Industrial Average dropped 167.16 points, or 1.01 percent, to close at 16,446.81. The blue-chip index was down more than 200 points at its session low.
The S&P 500 slumped 17.68 points, or 0.94 percent, to finish at 1,870.85. The S&P 500 earlier broke a key technical level, slipping below its 50-day moving average. And the Nasdaq declined 31.33 points, or 0.76 percent, to end at 4,069.29.
The Russell 2000 index entered correction territory, falling more than 10 percent from its all-time high of 1,212 reached in March.
On the economic front, consumer prices ticked up 0.3 percent in April, as expected, signaling some inflation in the economy. Industrial production slid 0.6 percent, disappointing estimates for a gain of 0.2 percent. Adding to negative news, home builder sentiment weakened slightly in May.
The bad news seemed to outweigh the positives: Jobless claims declined 24,000 to a seasonally adjusted 297,000, according to the Labor Department. That was the lowest reading since May 2007 and brought claims back to their pre-recession level. And New York manufacturers posted a strong growth in activity in May, according to the Federal Reserve Bank of New York’s monthly Empire State Manufacturing Survey.
Among earnings, Dow-listed Wal-Mart and small rival Kohl’s reported first-quarter numbers that disappointed.
Fed Chair Janet Yellen is scheduled to address the U.S. Chamber of Commerce after the market closes. Last week, Yellen said the economy is “on track for solid growth” this quarter, but warned that a deterioration in housing or financial markets could alter that scenario.
FRIDAY: Housing starts, consumer sentiment, Fed’s Bullard speaks
News Sources: CNBC and CNN Money