US Stocks Turn Lower in Late-Day Correction as Inflation Concerns Linger

US stocks gave up its gains on Thursday and closed lower as markets continued to face mounting inflation concerns.

The S&P 500 fell 1.1% to 4,482.73, the Nasdaq Composite slipped 1.3% to 14,154.02 and the Dow Jones Industrial Average was 0.9% lower at 34,715.39. The utilities sector was the only gainer, with all other sectors in the red. Consumer discretionary and materials were the hardest hit.

The 10-year US Treasury yield was down about 1 basis point to 1.82%.

West Texas Intermediate crude oil edged 0.1% lower to $86.90 a barrel. US commercial crude oil stocks rose by 500,000 barrels during the week ended Jan. 14 after a decline of 4.6 million barrels in the previous week, compared with a 1.8 million barrel decrease expected in a survey compiled by Bloomberg.

It's "hard" for central banks to combat inflation triggered by supply issues, and production is still being constrained in many countries by the impact of the pandemic as well as public health measures, Desjardins said in a note. Higher interest rates will not resolve supply problems, according to the firm. The best remedy is bringing the COVID-19 pandemic under control and lifting public health measures, it added.

In economic news, the adjusted number of initial unemployment claims grew by 55,000 to 286,000 during the week ended Jan. 15, the Department of Labor said Thursday. That's compared with the Econoday consensus of 207,000. The previous week's reading was revised up by 1,000 to 231,000.

"This increase is much more about the hit from omicron," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. "It won't last long, given that cases have now started to fall, but the near-term path of claims is now very unpredictable."

Home resales fell by 4.6% in December from November to a 6.18 million seasonally adjusted annual rate, the National Association of Realtors reported. Sales were down 7.1% from December 2020. All four US regions posted month-over-month sales declines in December and were down from a year ago when sales were brisk.

Sales hit a 15-year high in 2021, rising to 6.12 million from 5.64 million in 2020. The NAR expects sales to slow in the coming months due to higher rates.

In company news, Travelers Cos. TRV reported higher-than-expected results in the fourth quarter amid record net written premiums. Shares jumped 3.1%, among the biggest gainers on S&P 500 and the Dow.

Peloton PTON temporarily halted production of connected fitness products due to waning demand as well as cost controls, CNBC reported. Shares slumped 24% after trading was halted multiple times due to volatility.

Gold was down 0.2% to $1,841.20, silver was up 1.1% to $24.51 an ounce, and copper was 1.3% higher to $4.53 per pound in metals market trading. Among energy ETFs, the United States Oil Fund was down 0.6% to $60.66, and the United States Natural Gas Fund was down 4.6% to $12.83.