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U.S. stock-market indexes traded modestly lower Thursday as investors digested a slew of earnings reports and economic data.
The Nasdaq Composite retreated from a record set as sentiment was dented following a tumble in shares of Snap Inc. The parent of Snapchat late Wednesday reported a $2.2 billion loss in its first quarter after IPO. The tech-heavy index COMP, -0.63% was down 36 points, or 0.6%, to 6,092.
The S&P 500 SPX, -0.52% also retreated from its record close, declining 13 points, or 0.5%, to 2,386, with all 11 main sector trading lower. Consumer discretionary stock led the decliners, down 1%.
The Dow Jones Industrial Average DJIA, -0.43% fell 100 points, or 0.5%, to 20,845.
Higher oil prices failed to support stocks Thursday. U.S. crude prices CLM7, +1.50% added to Wednesday’s gains with a 1.3% rise to $47.93 a barrel, on the heels of data showing the biggest weekly drawdown for inventory since December, but energy shares were trading nearly flat.
“Both corporate earnings and economic data were pretty good in the first quarter and underpinned the rally so far. But with earnings season almost over, we might see some sideways moves until June when the Fed is likely to raise rates,” said Mark Kepner, managing director of sales and trading at Themis Trading.
Kepner noted that very low levels of realized and implied volatility increase the odds of pullbacks in the near term.
The measure of implied volatility on the S&P 500, CBOE Volatility Index VIX, +9.40% was up 2.7% at 10,49, hovering near historic lows.
Calling the Fed’s bluff: The prior session’s moves came after the shock firing of FBI Director James Comey, but the stock market’s reaction to this was fairly sanguine, despite questions over whether it would crimp U.S. President Donald Trump’s ability to push through market-friendly policies.
Joel Kruger, currency strategist at LMAX Exchange, said that while politics could factor into stock movements, Federal Reserve policy will likely dictate the direction for equities.
“Conversations about a stock market top are certainly not without merit. But it has also been abundantly clear stocks will only be at risk when the market truly believes the Fed isn’t going to fold its hand when it comes to forward guidance,” Kruger wrote in emailed comments.
“We may be getting close to that point, but until then, investors will keep pushing their bets and calling the Fed’s bluff,” he said.
Early Thursday, New York Fed President William Dudley said trade protectionism is a “dead end” that will eventually harm the U.S. economy, Reuters reported. The comments, in a speech on the benefits and challenges of globalization in Mumbai, were seen as implied criticism of Trump’s policies, even though Dudley did not mention the U.S. leader by name.
As for economic data, weekly jobless claims fell by 2,000 to 236,000, while continuing claims fell to the lowest level since Nov. 1988. Low levels of layoffs underline a strong labor market.
U.S. producer prices showed a broad-based gain in April, making for the largest annual advance in five years.
Shares of Macy’s Inc. M, -13.26% dived 12% after the retailer reported a worse-than-expected slide in revenue in the first quarter.
Straight Path Communications Inc. STRP, -20.29% shares sank 22% after the company confirmed an agreement to be bought by Verizon Communications Inc. VZ, -0.42% in a deal that values Straight Path at a deep discount to Wednesday’s closing price.
Other markets: Asian markets ADOW, +0.53% finished higher, with China SHCOMP, +0.29% squeezing out a gain of 0.1% as investors fretted over liquidity worries. European stocks SXXP, -0.62% were trading mostly flat to lower. The FTSE 100 UKX, -0.07% was holding steady ahead of the Bank of England’s update on inflation and interest rates.
The price of a single bitcoin BTCUSD, +4.01% reached a new milestone on Thursday, shooting past the $1,800 level for the first time. Bitcoin prices were up last up 4.9% to $1,827.55. Earlier in the week, bitcoin shot past $1,700 for the first time.
The yield on a 10-year Treasury note TMUBMUSD10Y, -0.99% was unchanged at 2.42%.