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Stocks Close Lower as Bond Yields Rise; Jobless Claims Above 800,000

Stocks fall as bond yields resume their climb, jobless claims increase more than expected and earnings from retail giant Walmart disappoint.

Stocks finished lower Thursday as bond yields resumed their climb and earnings from retail giant Walmart  (WMT)  disappointed.

Equities also were lower following a Labor Department report that said weekly jobless claims in the U.S. rose more than expected. Jobless claims rose to 861,000, the highest reading in a month.

The yield on the 10-year Treasury rose as high as 1.318%, near its highest level in a year. The rise in yields has increased concern about higher inflation and fears that rising borrowing costs could lead to a stock market pullback.

The Dow Jones Industrial Average dropped 119 points, or 0.38%, to 31,493 and the S&P 500 declined 0.44%. Walmart  (WMT)  and Boeing  (BA)  led the Dow industrials lower.

The tech-heavy Nasdaq slumped 0.72% as technology-related companies can be more vulnerable to inflation pressures.

Shares of Walmart finished down 6.4% after the world's largest retailer posted weaker-than-expected fourth-quarter earnings on sales of more than $150

Walmart also said it expected fiscal 2022 sales to rise by only low-single-digits percent, with operating income and earnings to be flat to up slightly.

Walmart pledged to boost average employee wages to $15 an hour and boost total capital expenditures to $14 billion. 

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Meanwhile, the Federal Reserve said in minutes from its late-January meeting that the coronavirus pandemic still poses "considerable risks" to the economy and that "the stance for policy would need to remain accommodative until those goals were achieved." 

The Fed added it would be “some time” before conditions would enable it to begin scaling back its purchase of $120 billion of bonds per month.

The minutes also showed Fed officials weren't terribly concerned about recent inflation pressures. Fed Chairman Jerome Powell has cautioned that inflation could rise, but only temporarily, as the economy reopens.

Energy prices rose again Thursday, with Brent crude trading around $64 a barrel, as a deep freeze in Texas has taken out almost 40% of U.S. crude production, according to Bloomberg.

The Dow posted a record close for a second day in mixed trading Wednesday as U.S. retail sales and producer prices surged in January and bond yields traded at their highest levels in a year.

GameStop  (GME)  finished down 11% as the House Financial Services Committee was holding a hearing focused on the recent trading frenzy surrounding the stock of the videogame retailer and other heavily shorted stocks.

GameStop Hearings Expectations by Jim Cramer on Real Money

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