U.S. market indexes closed broadly lower again on Thursday. Economic data for the week has continued to trend lower and today’s report on jobless claims also added to the lower trend. On Thursday, the Dow Jones Industrial Average closed at 17,660.44 and was flat for the day with a 0.05% gain. IBM (IBM, Financial) led gains, while JPMorgan (JPM, Financial) led losses. The S&P 500 was also flat, closing at 2,050.61 for a gain of 0.51 points or 0.02%. The Nasdaq Composite closed lower for the day at 4,717.09 for a loss of 8.55 points or 0.18%.
The market’s lower valuations have largely been a result of weakening economic data reports. This week’s data has continued to be low following the Bureau of Economic Analysis’ GDP report, which showed a growth rate of 0.5%. Employment data this week has also been lower and it seems the April Employment Situation report to be released by the Bureau of Labor Statistics Friday, will also likely be flat to lower.
Wednesday’s ADP report showed fewer jobs added in the private sector than consensus and Thursday’s jobless claims were higher than expected.
With this main indicator seemingly trending lower, effects on the Federal Reserve’s plans for an interest rate change could be at risk. While economic data is trending lower in the first quarter, analysts think this may be an anomaly. In an interview with CNBC, Michael Bell from JPMorgan Asset Management gave his insight on the weak first quarter data and what investors can expect from the Federal Reserve. According to Bell, the Fed will likely raise rates again in June or July with one additional rate increase in the second half of the year. This is slightly slower than previously expected at the beginning of the year.
