Stocks steadied as communication services led: Thursday recap

Stocks steadied on Thursday, one day after the market’s yield-driven slide. The S&P 500 finished all but unchanged, easing 0.02% to 7,704.13. The Nasdaq Composite edged up 0.01% to 26,939.37. The Dow Jones Industrial Average lagged the two, slipping 0.31%, or 161 points, to 51,349.98. Little conviction moved either way. The averages spent the session clawing back early losses, and by the close the damage had mostly healed. For a second straight day, the bond market set the terms. This time, stocks absorbed the pressure and held.

Beneath the flat headline, the sector map spread out. Communication services led, its sector fund up 1.27%, the widest gain of the day. Health care followed with a 0.63% rise, and energy added 0.37%. Those were the only three groups to finish higher. Everything else fell. Materials took the worst of it, down 1.19%, with utilities off 0.98% and consumer staples 0.89% lower. Industrials slipped 0.75% and real estate lost 0.45%. Technology eased 0.32%, while financials landed almost exactly flat, down 0.02%. Defensive groups pulled in different directions, with health care leading and utilities and staples among the laggards. The gap between the best and worst sectors ran wider than the near-zero move in the indexes let on.

The backdrop did more to steady the tape than any single catalyst. Treasury yields stayed elevated after Wednesday’s climb to their highest levels since 2007, a headwind that capped gains for most of the session even as stocks pared their early declines. Higher yields lift borrowing costs and dull the appeal of longer-duration and dividend-paying shares, which is part of why the rate-sensitive corners struggled again. The day’s data leaned firm. New applications for unemployment benefits held near multi-decade lows, with initial jobless claims at 197,000 for the week ended September 19, down 1,000 from the prior week. Housing gave a second solid reading. New home sales rose 6.4% in August to a seasonally adjusted annual rate of 684,000, well above forecasts, as builder price cuts and incentives pulled buyers in despite higher mortgage rates. The median new-home price was little changed at $393,700, a sign that sellers leaned on discounts and concessions to move inventory.

Breadth stayed even. The Russell 2000 small-cap index, tracked by the IWM fund, dipped 0.09%, moving in step with the large-cap benchmarks rather than leading or trailing them. That is a quieter tone than recent sessions, when smaller companies swung harder on every shift in rates. Volatility stayed subdued. The Cboe Volatility Index rose 3.23% to 15.67, a modest uptick in percentage terms that still leaves it low by historical standards. The options market stayed calm.

The week closes with durable goods orders and a final consumer sentiment reading on Friday, with the orders figure expected to ease after a strong prior month. More data follows next week. Job openings and consumer confidence lead it, with yields elevated and the economic calendar setting the near-term tone ahead of earnings season.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.