Stocks were muted Thursday after the S&P 500 Index closed at a fresh record high in the previous session. The broader market index dipped slightly below the flatline, while the Dow Jones Industrial Average rose nearly 80 points and the tech-heavy Nasdaq Composite declined about 0.1%, as market participants look ahead towards Friday's month jobs report.
Here's how the market settled on Thursday:
S&P 500 Index (NYSE: SPY): -0.02% or -1.07 points to 5,352.96
Dow Jones Industrial Average (NYSE: DIA): +0.20% or +78.84 points to 38,886.17
Nasdaq Composite Index (NASDAQ: QQQ): -0.09% or -14.78 points to 17,173.12
In Focus:
Market attention has turned towards the Labor Department's nonfarm payrolls report for May set to release Friday morning, which is expected to show 190,000 job additions with the unemployment rate remaining at 3.9%.
Deutsche Bank Marco Strategist Henry Allen wrote in a research report this week that if the month's unemployment rate comes in at 3.9% or less, it will represent the "longest stretch of sub-4% unemployment since the early 1950s."
"Time will tell if the early-1950s offer a good parallel, but if these similarities do hold, there could be a lot of scope for optimism," Allen wrote, quoted by CNBC. "In particular, low unemployment has often been a spur to productivity growth, as firms find it more difficult to hire workers and become more focused on helping their existing staff to be more productive. Given the growth of AI in our own time, this suggests there could well be some uptick risk to economic growth over the years ahead."
In Economic News:
Initial Unemployment Filings totaled 229,000 for the week ended June 1, the Labor Department reported Thursday, rising by 8,000 from the previous update and topping estimates. Continuing jobless claims, which are tracked a week behind, were little changed week-to-week at a total of 1.79 million.
On the Earnings Front:
Lululemon Athletica (NASDAQ: LULU) reported better-than-expected first-quarter earnings, but issued disappointing second-quarter outlook on waning demand in the Americas, the athletic retailer's largest market. The company also announced it would add $1 billion to its stock buyback program.
Lululemon expects revenue between $2.40 billion and $2.42 billion for its current quarter, below analyst estimates, on earnings per share in the range of $2.92 and $2.97.
"We are pleased by the progress we are making to optimize out U.S. product assortment," CEO Calvin McDonald said in a statement. "Looking ahead, we continue to have a significant runway for growth and are confident in our team's ability to powerfully deliver."
For its full year guidance, Lululemon expects revenue between $10.7 billion and $10.8 billion on earnings per share in the range of $14.27 and $14.47, with revenue in-line with expectations.
Five Below (NASDAQ: FIVE) shares were under pressure on Thursday after the discount retailer reported disappointing first-quarter earnings and issued weak revenue guidance for its second quarter and full year. For its current quarter, Five Below expects $840 million at its midpoint. The company also lowered its full year revenue outlook to $3.83 billion at the midpoint from $4.02 billion.
"The lower-end customer is really being stretched," CEO Joel Anderson said during an earnings call on Wednesday, adding that "Consumers were more discerning with their dollars, increasingly buying to need." The types of items consumers are buying, Anderson said, include the company's "consumable" categories like food and beverage, beauty and health.
In the News:
Robinhood Markets (NASDAQ: HOOD) announced Thursday it has agreed to buy cryptocurrency exchange Bitstamp in a nearly $200 million all-cash deal. This acquisition puts the popular retail trader app in direct competition with large crypto exchanges like Coinbase (NASDAQ: COIN) and Binance. The deal is expected to close in the first half of 2025.