Stock market sharply lower on jobless claims, strong GDP; The meme share AMC plunges into capital raising

Stocks fell sharply Thursday morning, led by the technology sector, after little change in jobless claims and stronger-than-expected economic growth. Weak earnings from the chipmaker Micron technology (MU) and meme stock AMC EntertainmentThe capital raising (AMC) also hurt shares.


The Nasdaq composite fell 2.8% while the S&P 500 fell 2%. The Dow Jones Industrial Average lost 1.5 percent. The small-cap Russell 2000 index fell 2%.

Volume rose on the Nasdaq but fell on the NYSE vs. same time on Wednesday.

The interest rate on the benchmark 10-year government bond was virtually unchanged at 3.67%. Crude oil prices were flat at $78.30 per barrel.

Jobless claims rise as recession fears grow

All 11 S&P sectors lost ground on Thursday. The S&P Technology Select Sector ETF ( XLK ) was the worst performing sector, down 2.6%.

Initial jobless claims rose modestly to 216,000, which was below estimates for a rise to 225,000 from 211,000 last week.

Meanwhile, the third estimate for Q3 GDP came in stronger than expected, showing growth of 3.2% versus the second estimate’s 2.9%.

On Friday, investors will shift their attention to more inflation data, with the release of November’s personal consumption expenditure figures.

Chinese shares rose sharply on Thursday, as Hong Kong’s Hang Seng index rose 2.7 percent. China’s securities regulators have promised to allow overseas listings of technology companies. Ali Baba (BABA) fell 0.3%, while (JD) and Pinduo duo (PDD) each fell more than 1%.

In London, the FTSE fell 0.4% after Britain said the economy contracted more than expected in the third quarter. The German DAX fell 1.3% and the French CAC fell 0.9%.

Amazon ( AMZN ) fell 3.8% as rising jobless claims were seen as another indicator of a coming recession.

Dow Jones Technology Leaders apple (AAPL) and Microsoft ( MSFT ) also fell more than 3% each.

Stock market falls on earnings, company news

The Innovator IBD 50 ETF ( FFTY ) fell 2% Thursday, led down by oil and chip stocks.

Micron technology (MU) fell more than 4.5%.

Late Wednesday, the memory chip maker missed estimates for its fiscal first quarter amid a cyclical downturn. The chip industry also sharply lowered estimates for the current quarter, sending chip stocks into big early losses.

MU shares are trading below the 50-day moving average and near the 52-week low reached on September 23.

CarMax (KMX) plunged more than 7% after management said inflation and rising interest rates led to “car affordability issues.” The company fell well short of profit estimates for the third quarter. The used car dealer reported earnings of 24 cents per share for the quarter ended Nov. 30. The consensus among analysts tracked by FactSet was 65 cents.

Under Armour (UA) said Wednesday that Stephanie Linnartz will join the company as CEO, effective Feb. 27. Colin Browne, who has been interim president and CEO since June, will resume his role as CEO.

Linnartz becomes the clothing store’s first female president. She currently serves as president of Marriott International (MAR). Under Armor fell more than 3% and Marriott shares fell more than 1%.

Stock Market Movers And Shakers

Shares of AMC Entertainment ( AMC ) plunged 14% to a 22-month low after the theater operator announced a $110 million equity raise. The meme stock said it also asked the company’s board for a 1-for-10 reverse split of common stock.

Tesla (TSLA) doubled the rebates offered on its Model 3 and Model Y electric vehicles delivered in the United States this month, according to its website.

“Take delivery of a new Model 3 or Model Y between December 21 and 31, 2022, for a $7,500 credit and 10,000 miles of free Supercharging,” the electric car maker says on its website.

The Tesla credits come after President Joe Biden signed a legislative package in August that includes tax incentives for electric cars. Shares of Tesla fell more than 8% on Thursday morning.

Airlines are canceling hundreds of flights as a powerful winter storm is expected to bring freezing temperatures and snow to parts of the country. United Airlines (UAL), Delta Air Lines (DAL) and American Airlines (AAL) all fell between 3% and 6%.

More than 1,200 US flights scheduled for Thursday had been canceled by Wednesday afternoon, according to FlightAware, a flight tracking site.

Gilead Sciences (GILD) won Food and Drug Administration approval for a twice-a-year HIV treatment on Thursday. The GILD share was unchanged.

Dow Jones member larva (CAT) fell more than 2% after breaking out past a 239.95 buy point on Wednesday. Bullishly, the stock’s relative strength line, an important technical indicator, reached a new high. The CAT stock shows a strong 98 out of a perfect 99 IBD Composite Rating.

Follow Michael Molinski on Twitter @IMmolinski


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