U.S. stocks edged higher on Thursday, with financial stocks among the strongest of the day as they rose following a trio of quarterly results, putting Wall Street on track to narrowly avoid its third straight day of losses.
The Dow Jones Industrial Average DJIA, +0.02% traded 7 points higher to 20,601, a rise of less than 0.1%. The S&P 500 index SPX, +0.07% gained 2 points, or 0.1%, at 2,347. Both closed below their 50-day moving averages for the first time since early November on Wednesday, a bearish sign for near-term momentum.
The Nasdaq Composite COMP, +0.20% was up 18 points, or 0.3%, at 5,854.
Trading volumes aren’t expected to be heavy in Thursday’s action, which ends a holiday-shortened week. Markets will closed in observance of Good Friday, and ahead of Easter.
Financials were in focus after J.P. Morgan Chase & Co. JPM, +0.34% Citigroup Inc. C, +1.04% and Wells Fargo & Co. WFC, -1.48% reported quarterly results. While J.P. Morgan and Citigroup both beat expectations in their latest quarter, helped by gains in their trading divisions, Wells Fargo’s revenue fell short of forecasts, and the bank remains stuck in the spotlight for its recent sales-practices scandal.
Shares of J.P. Morgan and Citigroup were higher, but Wells slumped 1.8%. Overall, the financial sector was 0.2% higher on the day.
Wells Fargo shares were also hurt after Warren Buffett’s Berkshire Hathaway Inc. BRK.A, -0.22% said it sold more than 7 million shares of the stock between April 10 and April 12 to keep its stake under 10%.
The three were among the earliest major companies to report this earnings season, and as such, provided the first glimpse into how American corporations is faring in the current environment, where expectations for growth are high, but so are valuations by many metrics.
As banks, their earnings in particular have been highly anticipated. The sector was the best-performing group in the wake of President Donald Trump’s November election victory, lifting the overall market, but that rally has stalled. On Wednesday, the group turned negative for the year.
“The mood that investors will take from the bank earnings is predicated on what guidance looks like, and so far it remains constructive, if a tad lower than expectations. We could see a little less enthusiasm for banks going forward, and they’ll likely act as a modest headwind for any move higher,” said Peter Kenny, senior market strategist at Global Markets Advisory Group.
While major indexes were slightly positive on the day, the gains were concentrated within a few sectors. In addition to financials, the technology and consumer discretionary sectors were the only industries trading higher on the day. The eight other S&P 500 sectors fell.
In addition to earnings, investors were also cautious amid concerns about currency wars and geopolitical risks. Late Wednesday, Trump said the dollar “is getting too strong” and that he would prefer if the Federal Reserve kept interest rates low, speaking in an interview with The Wall Street Journal published Wednesday afternoon.
That leaves the U.S. stock benchmarks on track for weekly losses of about 0.4%.
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“There are concerns about the geopolitical landscape, and that is putting us into a stalemate,” Kenny said. “Markets are being held in check in terms of any kind of major upward bias or a major selloff. My sense is that we’ll see a choppy market with little upward bias for some time.”
Gold GCM7, +0.67% has benefited, as investors look for a safe place to invest amid the heightened geopolitical tensions. Prices for the precious metal continued to rise on Thursday, up 0.6%. If gold settles at that level, it will be the highest close for the metal since early November.
Warrior Met Coal Inc. priced its initial public offering at $19 a share Thursday, at the high end of its expected range.
In the latest economic data, weekly first-time jobless claims fell slightly in the latest week, dropping to 234,000. Separately, the producer-price index fell 0.1% in March, though core PPI—which excludes food, energy, and trade—was up 0.1%.
A preliminary reading of consumer sentiment from the University of Michigan also came in at a reading of 98 in April from 96.9 in March, better than Wall Street expectations and highlighting a trend of upbeat so-called soft data, or sentiment and survey reports, which haven’t yet translated into concrete improvements in consumption and spending.
A weekly read from Baker Hughes on the number of active rigs drilling for oil will be released Thursday afternoon. Typically the data comes out on Friday, but it was moved because of the holiday.
Other markets: Oil prices CLK7, -0.13% were 0.1% lower. Futures pared earlier losses after the International Energy Agency said the oil market is “very close” to a balance. In recent years, a persistent supply glut has kept oil prices under pressure, forcing major oil producers to cut production to rebalance the market.