Stocks opened lower Thursday as investors continued to fret about a rare downgrade to the U.S. credit rating. However, markets turned higher mid-morning amid a busy batch of economic data and earnings reports.
One of the more notable headlines to emerge from today's jam-packed economic calendar was that worker productivity increased 3.7% in the second quarter, while unit labor costs rose at their slowest annual pace since 2021.
"Labor productivity, while still weaker than in previous cycles, recovered during the second quarter of the year and has continued to push down unit labor costs," says Eugenio Alemán, chief economist at Raymond James. This is good news for the Fed, the economist adds, as it "weakens the argument that labor costs are a threat to the disinflationary process going forward."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
In other econ news, ahead of tomorrow's key July jobs report, data from the Labor Department showed that initial jobless claims rose by just 6,000 last week to 221,000. The figures reveal a resilient labor market, and it's likely tomorrow's payrolls data will show more of the same.
"Job growth tends to remain strong in July when the labor market is tight – reflecting strong hiring of youth summer workers – and three of the alternative measures of employment growth we track indicate a strong pace of job growth," says Jan Hatzius, chief economist at Goldman Sachs.
PayPal, Qualcomm stocks sink after earnings
As for today's earnings reports, PayPal Holdings (PYPL) fell 12.3% after the fintech firm disclosed its second-quarter results. While PayPal beat on both the top and bottom lines, its adjusted operating margin of 21.4% fell short of company guidance.
Still, Argus Research analyst Stephen Biggar maintained a Buy rating on the financial stock. "We expect PayPal to benefit over time from secular trends that have boosted growth for credit card processors, such as the increasing use of digital payments over checks and cash for both convenience and security," Biggar says. Additionally, the analyst expects PYPL to expand its market share as "the company leverages its platforms globally and takes advantage of its strong brand recognition and rapid growth in merchant acceptance."
Qualcomm (QCOM) was another stock that declined despite reporting higher-than-expected earnings and revenue. The semiconductor stock fell 8.2% after Akash Palkhiwala, chief financial officer of Qualcomm, said on the earnings call that revenue growth in its upcoming fiscal year "will largely depend on macroeconomic environment, global handset units and [a slower] China recovery."
Energy stocks pop on Saudi Arabia news
Energy was the best-performing sector today, jumping 1.0% as U.S. crude futures climbed 2.6% to $81.55 per barrel. Saudi Press Agency – a state-owned media outlet – said Saudi Arabia plans to extend voluntary oil production cuts through September. BP (BP, +1.2%) and Exxon Mobil (XOM, +1.7%) were two of the day's best energy stocks.
As for the major indexes, the Nasdaq Composite finished down 0.1% at 13,959, while the S&P 500 (-0.3% at 4,501) and the Dow Jones Industrial Average (-0.2% at 35,215) also closed with modest losses.
On deck are Apple (AAPL) and Amazon.com (AMZN) earnings. In after-hours trading, AAPL is up 0.7% ahead of its fiscal third-quarter results. And AMZN stock is trading up 6.9% after its second-quarter beat.
Related Content
-
Dow Trims Its Loss to 498 Points: Stock Market TodayMarkets are wondering more and more about returns on the enormous amounts of capital hyperscalers are investing in AI.
-
Dow Falls 557 Points to Start NVDA Week: Stock Market TodayThe Oracle of Omaha saw growth and value in certain corners of the stock market during the third quarter.
-
Dow Dives 797 Points as Government Opens: Stock Market TodayThe process of pricing and re-pricing realities old and new never stops, and next week promises to be at least as exciting as this week.
-
5 Core Stocks Every Investor Should Own In 2026 and BeyondCore stocks are solid, long-term investments that provide stable returns and steady growth within your portfolio. Here are 5 we like.
-
Dow Climbs 327 Points, Crosses 48,000: Stock Market TodayMarkets are pricing the end of the longest government shutdown in history – and another solid set of quarterly earnings.
-
Risk Is Off Again, Dow Falls 397 Points: Stock Market TodayMarket participants are weighing still-solid earnings against both expectations and an increasingly opaque economic picture.
-
Amazon Surge Sends S&P 500, Nasdaq Higher to Start November: Stock Market TodayAmazon inked a $38 billion cloud deal with OpenAI, which sent the stock to the top of the Dow Jones on Monday.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
