Stocks closed mixed on Thursday, with the S&P 500 index and Nasdaq Composite bouncing off session lows in midafternoon after investors weighed mostly upbeat U.S. economic data, corporate earnings reports, and a second day of testimony by Federal Reserve Chairman Jerome Powell.

How did the benchmarks trade?

The Dow Jones Industrial Average

eked out a gain of 53.79 points or 0.15% today to 34,987.02

The S&P 500

fell 14.27 points or 0.33% today to 4,360.03

The Nasdaq Composite

closed down 101.82 points or 0.70% today to 14,543.13

On Wednesday, the Dow rose 44.44 points, or 0.1%, ending at 34,933.23; the S&P 500 index gained 5.09 points, or 0.1%, closing at 4,374.30; while the Nasdaq Composite Index shed 32.70 points, or 0.2%, finishing at 14,644.95.

What’s drove the market?

Stocks initially struggled to find direction after a round of mostly upbeat economic data, including a fall in new applications for unemployment benefits to a new pandemic low. Initial jobless claims fell by 26,000 to 360,000 in the seven days ended July 10, matching the forecast of economists polled by The Wall Street Journal.

Global economic data was also in focus, with China’s economy growing at a still-robust 7.9% over a year earlier in the second quarter. That was down from the previous quarter’s 18.3% surge, which was amplified by comparison with early 2020, when the world’s second-largest economy closed factories, stores and offices to fight the coronavirus.

Powell, in an appearance before the Senate Banking Committee, repeated his message from the previous day when he testified before a House panel, telling lawmakers that inflation has risen significantly and would likely remain high for a few months before moderating.

Powell said Wednesday that, with expectations that pricing pressures will eventually fade, the central bank was in no hurry to pare purchases of Treasurys and mortgage-related assets, which are currently running at $120 billion monthly, and described the economy as “still a ways off” from meeting the Fed’s self-described goals of “substantial further progress.”

Powells’ remarks showed that concerns about a “hawkish shift in tenor” at the Fed’s June policy meeting were overblown, said Andrew Schneider, U.S. economist at BNP Paribas, in a note.

“While the Fed has begun ‘thinking about’ tapering, we believe its bias remains for a prudent and patient policy approach, with the Fed largely welcoming signs of more sustained inflation and labor market recovery,” he wrote.

How long high inflation will persist is perhaps the big question dogging financial markets presently.

“These nagging concerns about inflation, transitory or otherwise have continued to dominate sentiment, while worries over the pace and persistence of rising prices, appear to be tempering optimism over the wider global recovery story,” wrote Michael Hewson, chief market analyst at CMC Markets UK, in a Thursday research note.

Chicago Fed President Charles Evans said in a webcast the central bank will get a clearer idea on the path of inflation by the end of the year. Like other top Fed officials, he’s blamed the recent spike in the cost of living on the reopening of the economy and the resulting shortages of supplies and labor.

U.S. bond yields fell for the second straight day furthering concerns that, despite inflationary fears, economic growth may already be peaking.

See: Gundlach says there is a simple reason Treasury yields are so low even as inflation surges

In other economic data, the Philadelphia Fed’s factory index fell to 21.9 in June from 30.7 in prior month. Separately, the New York Fed’s Empire State Index jumped 25.6 points to a record-high reading of 43 in July. Economists had expected a reading of 17.3, according to a survey by The Wall Street Journal. Any reading above zero for either index indicates improving conditions.

U.S. industrial production rose 0.4% in June, the Federal Reserve reported Thursday, but a shortage of semiconductors contributed to a 6.6% drop in production of motor vehicles and parts. Excluding autos, industrial output rose 0.8% in the month.

Meanwhile, the spread of the delta variant of coronavirus was also stoking anxieties on Wall Street. Dr. Francis Collins, director of the National Institutes of Health told CNN Wednesday that the “delta variant is spreading, people are dying, we can’t actually just wait for things to get more rational.”

“We’re losing time here,” the public health professional said as the U.S. vaccine program has slowed with 48.2% of the population fully inoculated, according to a tracker from the Centers for Disease Control and Prevention.

Which companies were in focus?

GameStop Corp. shares GME dropped 0.5% after Netflix Inc. NFLX announced its first major videogame hire, potentially signaling a move beyond its streaming-video roots.

Fellow meme stock AMC Entertainment

fared much better, paring its losses for the month by breaking a five-day losing streak to close up 7.7%

Shares of Morgan Stanley

edged up 0.2% after the brokerage and money management company reported profit and revenue that beat expectations, but trading revenue that fell short of forecasts.

Shares of UnitedHealth Group Inc. UNH rose 1.3%, after the healthcare provider reported second-quarter profit and revenue that were well above expectations and raised its full-year outlook, even as the company continued to expect COVID-19 to take a bite out of results. 

Ross Stores IncROST said late Wednesday that Chief Financial Officer Travis Marquette has resigned effective immediately to accept a position with another company which the retailer didn’t disclose. Shares fell by almost 1%.

How did other markets fare?

The yield on the 10-year Treasury note

fell 4.2 basis points to 1.303%. Yields and bond prices move in opposite directions.

The ICE U.S. Dollar Index
a measure of the currency against a basket of six major rivals, was up 0.2%.

Oil futures slumped, with the U.S. benchmark

down 2.2%, while gold futures

edged up by $4, or 0.2%, to settle at $1,829 an ounce.

In European equities, the Stoxx Europe 600

fell 0.9% and London’s FTSE 100

dropped 1.1%.

In Asia, the Shanghai Composite

rose 1%, the Hang Seng Index

advanced 0.8% and Japan’s Nikkei 225

fell 1.2%.

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