Wall Street Today | Market Slows on Oil Decline

U.S. stocks were taking a breather on Thursday following a rally that has carried the Nasdaq nearly 10% higher since the beginning of November, allowing both the tech-heavy index and the S&P 500 to exit correction territory.  WTI Crude dropped more than 4.7%, pulling the market lower.

Last week, the number of Americans who applied for unemployment benefits jumped to a three-month high of 231,000, suggesting some softening around the edges of a strong U.S. labor market. The government said that new jobless claims climbed 13,000 from a revised 218,000 in the prior week.

Claims still show a very low number of job losses and indicate the economy is stable, but businesses are hiring less, and the labor market appears to have cooled off a bit.

Economists had forecast new claims in the week ending Nov. 11 to total 222,000.

The Democratic-controlled U.S. Senate approved a short-term funding measure that prevents a government shutdown this weekend, after the Republican-controlled House of Representatives gave its OK on Tuesday. The deadline for a shutdown is Nov. 17."This Friday night, there will be no government shutdown," Senate Majority Leader Chuck Schumer, D-N.Y., said in a floor speech before the vote Wednesday night.

President Biden is expected to sign the bill soon to keep the government open until Jan. 19, the new deadline for a long-term budget deal to avoid a shutdown for the rest the government's fiscal year.

West Texas Intermediate (WTI) crude oil weakened for a second day on Thursday, dropping 4.9% as rising inventories amid record production in the United States continue to heighten demand concerns.

WTI crude oil for December delivery closed down US$3.76 to settle at US$72.90 per barrel, the lowest since July 6, while January Brent crude, the global benchmark, closed down US$3.76 to US$77.42 per barrel.

The drop follows Wednesday's weekly report from the Energy Information Administration, which showed a 3.6-million barrel rise in inventories last week, bringing the two-week rise to 17.5 million barrels, while US production stayed at a record 13.2-million barrels per day, 1.1-million bpd above the year-prior level.

That's down 6 basis points from the previous week. One basis point is equal to one-hundredth of a percentage point. A year ago, the 30-year rate was averaging 7.5%. The average rate on the 15-year mortgage was 6.76%, down from 7.81% last week. The 15-year was at 5.98% a year ago.

Freddie Mac's weekly report on mortgage rates is based on thousands of applications from lenders across the country submitted to Freddie Mac when a borrower applies for a mortgage. According to separate data from Mortgage News Daily, the 30-year fixed-rate mortgage averaged 7.45% on Thursday afternoon.