The stock market experienced a downturn on Thursday, despite the CNN Money Fear and Greed index remaining in the “Greed” zone. This apparent contradiction highlights the complex dynamics currently at play within the market.
While investor sentiment remained optimistic, as indicated by the Fear and Greed index reading of 67.2, several factors contributed to the downward trend. Growing concerns over the volatile situation in the Middle East weighed heavily on investor sentiment. Adding to the pressure, Levi Strauss & Co. (LEVI) reported disappointing third-quarter sales results and a lower-than-expected adjusted earnings per share (EPS) guidance for fiscal year 2024. The company’s decision to strategically review its Dockers brand and explore potential sales or other strategic transactions further amplified market anxieties.
Economic data released on Thursday provided a mixed picture. Initial jobless claims rose by 6,000 to 225,000 in the week ended Sept. 28, exceeding market expectations of 220,000. This rise suggests a potential uptick in unemployment, raising concerns about the health of the labor market.
On the other hand, the S&P Global services purchasing managers’ index (PMI) was revised downward to 55.2 in September, compared to the initial estimate of 55.4. This revision, while still indicating expansion in the service sector, reflects a slight slowdown in growth compared to August. Similarly, the S&P Global U.S. composite PMI dipped to 54 in September, pointing to a moderate decrease in overall economic activity.
The Dow Jones Industrial Average closed down by approximately 185 points to 42,011.59, while the S&P 500 fell by 0.17% to 5,699.94. The Nasdaq Composite also slipped slightly, closing at 17,918.47.
Most sectors within the S&P 500 ended the day in negative territory, with consumer discretionary, materials, and real estate stocks bearing the brunt of the losses. Energy and information technology sectors, however, bucked the trend and closed the session higher.
Investors are closely monitoring the earnings season, with Apogee Enterprises, Inc. (APOG) set to release its financial results today. The market’s performance in the coming days will likely be influenced by the flow of corporate earnings, economic data releases, and geopolitical developments.
