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Stocks End Lower, Tech Falls, Ahead of Inflation Data Report

Stocks end lower as Wall Street reacts to upcoming inflation report, rising omicron cases and Evergrande's default.
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Stocks finished lower Thursday as investors took a step back from a three-day rally to focus on upcoming inflation data.

The Dow Jones Industrial Average finished essentially flat at 35,754, the S&P 500 slipped 0.72% and the tech-heavy Nasdaq was off 1.71%.

The Bureau of Labor Statistics is scheduled to report the Consumer Price Index on Friday. 

Economists are expecting the CPI to show an increase of 6.8% for November, which would be the highest rate since Ronald Reagan was president in the early 1980s.

In China, indebted property developer Evergrande was officially declared to have defaulted on portions of its domestic obligation by Fitch Ratings, potentially triggering a so-called "cross default" on some $19 billion in foreign currency debt.

The omicron variant also sent a ripple through markets, according to Louis Navellier, chief investment officer at Navellier & Associates, who said "the world markets, after the biggest weekly rise in over 10 months, have stalled for today as the uncertainties about how Covid will play out given new restrictions being implemented in the UK."

"Notably, on the homefront, Jefferies had to postpone their back-to-office policy after a major outbreak of infections," Navellier said. "Expect volatility and skittish markets until more is known about the latest variant."

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Initial claims for state unemployment benefits fell 43,000 to a seasonally adjusted 184,000 for the week ended Dec. 4, the lowest level since September 1969. Economists polled by Reuters had forecast 215,000 applications for the latest week.

"With jobless claims hitting the lowest level in over 5 decades, this is a loud and clear sign that we’re making strides toward a full economic recovery despite some bumps along the way," Mike Loewengart, managing director of investment strategy with E*Trade Financial. 

"So as full employment seemingly becomes a reality, the Fed will be forced to focus more on taming inflation, which has no doubt been an ongoing concern for investors."

Loewengart, said "today’s read likely won’t rock the boat in either direction when it comes to Fed action."

 "And with the market a bit shaky after three up days in a row, it remains to be seen if this positive data will outweigh evolving pandemic concerns," he said.

In company news CVS Health  (CVS) - Get CVS Health Corporation Report shares rose 4.5% after the company said it would boost its dividend, and resume share buybacks for the first time in four years, ahead of the group's first investor day even under new CEO Karen Lynch.

Apple  (AAPL) - Get Apple Inc. Report shares ended slightly lower after the tech giant was crowned a "favorite idea" for investors for 2022 by one influential Wall Street analyst while being dubbed a “tech safety blanket” by another following last night's record high close.

GameStop Corp.  (GME) - Get GameStop Corp. Class A Report tumbled 10.4% after the video game retailer, and meme stock favorite, posted a bigger-than-expected third quarter loss and unveiled detail of a Securities and Exchange Commission subpoena.