Stock Market Today: Stocks Fall, Dashing Santa Claus Rally Hopes

Hopes for a late-in-the-year relief rally extension slip as chip maker Micron Technology warns of forthcoming losses and announces staff cuts.

Stock futures were lower in early trading on Thursday, dashing hopes of a last-minute Santa Claus rally, after strong consumer confidence data and better-than-feared earnings failed to offset negative news from semiconductor giant Micron Technology  (MU) - Get Free Report, which announced plans to lay off 10% of its workforce.

Dow futures traded 25 points lower, or 0.07%, for an implied negative open of 83 points. S&P 500 futures were down 0.1%, and Nasdaq 100 futures were 0.3% lower. The benchmark 10-year Treasury was up 2 basis points at 3.8448% in early New York trading, while the yield on the policy sensitive 2-year Treasury was at 4.2702%, up 2 basis points. Yields and prices move inversely.

The overnight moves followed two positive days for stocks, which had raised hopes for a so-called Santa Claus rally -- a period of historically positive returns for stocks leading into the Christmas holiday break. 

During regular trading Wednesday, the Dow gained 526.74 points, while the S&P 500 and Nasdaq Composite surged 1.49% and 1.54%, respectively -- thanks to consumer-confidence data that jumped to its highest level since April.

All 11 of the S&P 500's sectors ended higher, along with all three U.S. indexes -- which were, as of Wednesday's close, on pace for weekly gains.

Even with Wednesday’s gains, stocks are on pace to finish off the month of December with losses. The Dow is down 3.51%, while the S&P 500 and Nasdaq have tumbled 4.94% and 6.62%, respectively. All three major averages are slated to break a three-year win streak and post their worst yearly performance since 2008.

Driving some of the negative sentiment Thursday was Micron Technology  (MU) - Get Free Report, whose shares slipped 2% in overnight trading on disappointing quarterly results as well an updated forecast for first-quarter earnings that is less than half of what Wall Street analysts were expecting. The company also announced that it will lay off up to 10% of its workforce in the new year amid slumping demand for chips.

The chip industry is experiencing its worst imbalance between supply and demand in 13 years, Micron CEO Sanjay Mehrotra said Wednesday. Inventory should peak in the current period, then decline the rest of the year, Mehrotra said.

Under Armour  (UAA) - Get Free Report shares, meantime, shifted between gains and losses after the athletics apparel maker selected Marriott International  (MAR) - Get Free Report President Stephanie Linnartz as its next CEO. 

Linnartz is the third permanent chief executive in Under Armour’s 22-year history but the second since 2019, when the founder, Kevin Plank, stepped away from overseeing day-to-day activities. She was one of 60 candidates being considered by the company. 

Other stocks to watch include Tesla  (TSLA) - Get Free Report, whose shares inched higher in active premarket trading a day after the electric car maker's eclectic CEO, Elon Musk, announced he was stepping away as CEO of Twitter. Shares of Tesla have fallen more than 60% this year.

American depositary receipts for JD.com  (JDCMF)  and other Chinese technology companies such as Pinduoduo and Baidu, meanwhile, were higher ahead of the U.S. opening bell, echoing a rally in Hong Kong-listed Chinese tech stocks.

On Thursday, investors await earnings results from Carmax  (KMX) - Get Free Report as well as weekly jobless claims data. The Labor Department will release its weekly tally at 8:30 a.m. ET.

States reported that 211,000 workers filed for new unemployment benefits during the week ending Dec. 10, a decrease of 20,000 from the previous week's revised level. The number of workers continuing to claim unemployment benefits -- 1.67 million -- has been steadily rising through the year and is now just under the pre-pandemic average of 1.7 million. 

New weekly applications for jobless benefits have remained low all year, even as the technology and real estate sectors began to downsize in recent months. Layoffs overall also remain low, despite signs the economy will tip into a recession in 2023.

Indeed, despite persistent inflation and rising interest rates, U.S. employers added 263,000 jobs in November. There are nearly two job openings for every unemployed worker and the unemployment rate is 3.7%, just above a half-century low.