Stock futures falter after Dow record

Contracts linked to the Dow Jones Industrial Average have fluctuated between gains and losses, suggesting that the blue-chip index may be dampened after Wednesday’s close to an all-time high.

New data on Thursday showed weekly jobless claims fell to 730,000 for the week ended Feb. 20, down from the previous week and less than economists expected. The US economy grew in the fourth quarter at an annualized rate of 4.1%. New durable goods rose 3.4% in January for the ninth consecutive month, as manufacturing continued to rebound.

Investor appetite for risky assets rebounded on Wednesday following comments from Federal Reserve Chairman Jerome Powell that the central bank would keep interest rates low for some time.

Still, the recent sharp rise in bond yields – which closed Wednesday at their highest level in a year – has made some fund managers more cautious. These investors plan to move funds to less risky assets, such as bonds, and to stocks that have lower valuations than tech companies.

“The market is nervous. Rising bond yields are putting equities, especially growth equities, under pressure, ”said Sébastien Galy, macro strategist at Nordea Asset Management. “There is a bit of risk reduction in the broad sense,” he added.

Optimism about the economic recovery is prompting investors to shift their funds to stocks that may benefit from a rebound this year. This is weighing on tech stocks, which fueled much of the rally last year.

“The rise in bond yields triggers this rotation, away from growth stocks and more in favor of value stocks,” said Sophie Chardon, cross-asset strategist at Lombard Odier. “Rising yields support banks, rising oil prices support energy. It’s a change of leadership. ”

The benchmark 10-year Treasury yield rose to 1.460%, from 1.388% on Wednesday. Yields on government bonds rose as investors reduced their holdings of the safest assets.

Investors are also watching closely for signs of rising inflation following heavy doses of monetary and fiscal stimulus. At the same time, the markets have also become cautious, as recent economic data has shown that the rebound is likely to be slow and hesitant.

Results season draws to a close: Airbnb,

Beyond meat,

DoorDash and Salesforce.com are expected to release their results on Thursday.

Shares popular with Reddit users on the WallStreetBets forum soared in the last hour of trading on Wednesday, with volatility reminiscent of activity seen last month. In pre-release, GameStop climbed 55% and AMC Entertainment climbed 11%.

The moves show “that there is still liquidity and a lot of access to speculative betting,” said Chardon. “We have to be prepared to live with this type of targeted bubble, but I wouldn’t see it as a threat to the global stock market.”

Before the market opened, Moderna gained more than 3% after announcing a plan to increase its manufacturing capacity for Covid-19 vaccines. Best Buy fell 5.4% after announcing slower sales growth in 2021.

Oil prices continued to climb, with Brent rising for the fourth day. The international oil gauge added 0.5% to $ 66.51 a barrel, near its highest level since January 2020.

Abroad, the pan-continental Stoxx Europe 600 index fell 0.1%.

Among individual stocks, brewer Anheuser-Busch InBev fell nearly 5% after its fourth-quarter profit fell below estimates. British packaging company DS Smith has jumped more than 6% on reports that rival Mondi is considering a takeover.

Investors have also sold European government bonds in recent weeks, looking for higher yields. The yield on French 10-year bonds, which moves inversely to price, rose above zero for the first time since June and reached as high as 0.024%.

In Asia, most of the major benchmarks ended the day. The Shanghai Composite Index rose 0.6% and the Hong Kong Hang Seng Index climbed 1.2%. South Korea’s Kospi index rose 3.5% after its central bank kept interest rates at historically low levels.

Write to Anna Hirtenstein at [email protected]