After seemingly weeks of markets doing nothing, stocks are firmly in the red on Thursday.
In early trading, the Dow was down about 110 points, the S&P 500 was off about 0.6%, and the Nasdaq was down 0.7%. Near 1:00 p.m. ET, stocks had pared most of their gains however, with the Dow down just 56 points, the S&P 500 down 0.4%, and the Nasdaq off 0.4%.
This move in stocks comes as much of the discussion around markets has been dominated by the decline of volatility. The Vix, which measures expected volatility in the S&P 500, had been up as much as 8% on Thursday. In an interview with Reuters on Wednesday, DoubleLine’s Jeffrey Gundlach said the Vix “is insanely low.”
Adding, “Anytime the VIX is below 10, if you could actually buy it, you should. But people can’t buy the VIX. A regular Joe can’t go long the VIX.”
This morning, we got two pieces of economic data that show the U.S. economy remains strong, with producer prices — a measure of inflation — rising 0.5% over the prior month, more than the 0.2% that was expected. Additionally, initial jobless claims also topped expectations, totaling just 236,000 last week, with continuing filings for unemployment insurance hitting the lowest in 28 years.
In afternoon trade, the U.S. 10-year yield was sitting hear 2.39% while the two-year was at 1.33%. Crude oil prices were slightly higher, with WTI crude up 1.3% to trade just below $48 a barrel.
On the stock side, the big losers on Thursday were some prominent brand names, most notably Snapchat parent company Snap Inc. (SNAP), which was down about 20% after reporting a disappointing quarter on Wednesday. This was Snap’s first report since going public in early March.
Snap reported daily active users grew to 166 million, less than the 168 million that was expected, while revenue also came in light, hitting $149.6 million for the quarter, less than the $158.6 million expected by Wall Street. Snap lost $2.31 per share during the quarter.
Like other social media platforms including Twitter, Facebook, and Instagram, user growth has been a focus for investors. Instagram Stories, which many consider a clear ripoff of Snapchat’s popular Stories feature, has a reported 200 million daily active users.
On Snapchat’s first quarter earnings call, CEO Evan Spiegel downplayed the significance of the user growth number, saying he views this number as a “derivative” of engagement on the platform, meaning that user growth will only follow actual user use of Snapchat. Spiegel dismissed what he called “growth-hacking” techniques other platforms might use to inflate their user base numbers.
Also in the red on Thursday were shares of Macy’s (M), down over 14% in afternoon trading, after reporting earnings that disappointed.
Macy’s reported earnings per share of $0.24, less than the $0.35 expected by analysts, on same-store sales that dropped 4.6%. Analysts were looking for a 3.5% drop, according to estimates from Bloomberg.
Also in retail earnings, Kohl’s (KSS) reported earnings per share that topped estimates though same-store sales declined more than expected during the quarter. Shares of the retailer were down about 5% in early trade.
Kohl’s reported adjusted earnings per share of $0.39, topping estimates for $0.29, while same-store sales fell 2.7%, more than the 1.1% expected by analysts.
Nordstrom (JWN), which is expected to report earnings after the market close on Thursday, was down 7% in early trade.
The S&P 500 department store index was down as much as 9% in early trading on Thursday.
Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland
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