CV stock slips after recovery rally

US stocks sank on Thursday after a recovery rally in the previous session helped all three major averages post gains of well over 1%.

The S&P 500 was down 0.8% in early trading, while the Dow Jones Industrial Average was down 220 points, or about 0.7%. The tech-heavy Nasdaq Composite led the decline — down about 0.8%.

On Wednesday, the S&P 500 rose 1.8%, the Dow Jones Industrial Average about 1.4% and the Nasdaq Composite 2.1% – snapping a seven-day losing streak and posting its biggest jump in four weeks.

On the economic date front, initial jobless claims fell to their lowest rate since May. First-time jobless claims rose to 222,000 in the week ended Sept. 3, the Labor Department said Thursday. Economists called for 240,000 claims, according to consensus estimates compiled by Bloomberg.

On Wednesday, the S&P 500 rose 1.8%, the Dow Jones Industrial Average about 1.4% and the Nasdaq Composite 2.1% – snapping a seven-day losing streak and posting its biggest jump in four weeks.

All eyes will be on Federal Reserve Chairman Powell on Thursday morning as he speaks at the Cato Institute’s 40th Annual Monetary Conference in Washington. The appearance will mark Powell’s last public remarks before the US central bank’s next policy announcement on the 21 September.

Across the Atlantic, the European Central Bank raised interest rates by an unprecedented 75 basis points and signaled further increases after euro zone inflation hit a new record high.

The increase will come just two weeks before the Federal Reserve prepares to raise US interest rates by 0.75% for the third time in a row. Some market participants had hoped that policymakers would slow the pace of their rate hike campaign this fall, but strong economic data on the jobs and manufacturing fronts have tempered those expectations.

Federal Reserve Board Chairman Jerome Powell speaks during his re-election hearing before the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill in Washington, U.S., January 11, 2022. Brendan Smialowski/Pool via Reuters

CME Group’s Fedwatch tool reflects expectations for a three-quarter rate increase to about 76%, from 69% a week ago.

Goldman Sachs also raised its estimate for interest rates to rise 75 basis points in September from its previous expectation of a 0.50 percent rise, according to a note by economists led by Jan Hatzius.

Shares of GameStop ( GME ) rose nearly 3% after announcing its partnership with crypto platform FTX late Wednesday. The video game retailer also reported second-quarter earnings that showed losses widened to $108.7 million, while sales fell 4 percent from a year ago to $1.14 billion.

Shares of American Eagle Outfitters ( AEO ) fell more than 10% in early trading after the company missed earnings, cut its quarterly dividend and warned that “demand trends remain challenging” in the current quarter.

In commodity markets, oil prices moved slightly higher after settling at a fresh seven-month low. On Wednesday, West Texas Intermediate crude fell 5.7% to $82.32 a barrel, its lowest level since Jan. 13, and Brent futures fell 5.4% to $87.62 a barrel.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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