Stocks Slip as November Rally Takes a Breather
Stocks fell slightly Thursday as this month’s market rally appeared to take a pause.
Alibaba (BABA) on Thursday reported quarterly profit that missed market expectations, and said it would not proceed with the full spin-off of its cloud intelligence group. Its U.S. shares fell 8% in morning trading.
Shares of Cisco Systems dropped 10% after the company offered weak guidance for the current quarter and full fiscal year. Palo Alto Networks shed 6% after the cybersecurity company issued a dismal forecast on billings. Macy’s stock popped 8% in premarket trading after the company topped fiscal third-quarter earnings estimates.
The moves follow a winning day on Wall Street as investors cheered the latest inflation data. The Dow added more than 160 points, finishing its fourth straight winning session with a gain of around 0.5%. The S&P 500 and Nasdaq Composite climbed about 0.2% and 0.1%, respectively.
On Thursday, data showed that import prices fell 0.8% in October, more than the 0.3% economists surveyed by the Dow Jones had expected. This, combined with an increase in weekly jobless claims last week, follow key inflation reports from earlier this week showing that inflation is finally slowing down.
October’s producer price index, a gauge of wholesale prices, slid 0.5%. That marked its biggest monthly decline since April 2020.
That came a day after the consumer price index remained flat for October, another encouraging sign for investors hoping the Federal Reserve has seen the path of inflation cool enough to stop hiking interest rates. Tuesday’s session brought the biggest gains for the S&P 500 and Nasdaq since April.
With November about halfway through, the S&P 500 is up more than 7% for the month, while the Dow has advanced nearly 6%. The Nasdaq has leapt 9.8% in the period.
These recent advances could be indicative of a longer term trend, said Barbara Doran, founder of BD8 Capital Partners. That’s because the recent inflation data can imply the Federal Reserve is done raising interest rates. The market being in a seasonally strong time historically is also a positive sign, she added.
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