Dow could see 5th straight drop as stock futures indicate lower open – MarketWatch

U.S. stocks fell on Thursday, with major indexes slumping in a broad decline as some disappointing quarterly results and uncertainty over how to interpret the Federal Reserve’s recent policy statement left investors on the sidelines.

What are the main benchmarks doing?

The Dow Jones Industrial Average DJIA, -1.48% fell 240 points, up 1%, to 23,694. If the blue-chip average closes lower on Thursday, that will mark its fifth straight daily decline, as well as its 10th decline of the past 12 sessions. With the decline, the Dow is at risk of closing below its 200-day moving average for the first time since early April.

The S&P 500 index SPX, -1.43% lost 22 points, or 0.9%, to 2,612. The Nasdaq Composite Index COMP, -1.45% lost 51 points, or 0.8%, to 7,046.

Read: History suggests the stock market isn’t overly expensive right now

What’s driving markets?

Investors continued to weigh the next move from the Federal Reserve, which on Wednesday acknowledged U.S. inflation is ticking higher. Rising rates, along with a shrinking Fed balance sheet, is widely seen as one of the primary risks facing markets.

Economists, however, said the Fed’s language indicated the central bank wasn’t eager to accelerate the pace of rate increases even if inflation posts some relatively hot readings over the summer.

And read: How the Fed decides if the economy is headed to a recession

Don’t miss: Should markets expect a recession? Every Republican since Teddy Roosevelt has had one in their first term

Rate increases bring in the prospect of higher borrowing costs for corporations and consumers, as well as strengthening in the dollar, which can all send ripples through global stock markets.

Investors will be on the alert for developments from Beijing, where U.S. and Chinese officials are meeting for discussions on tariffs and other trade issues. Worries about trade hostilities between the top two global economies have roiled financial markets in recent months.

What are strategists saying?

“The primary thing missing from the market right now is something to spur us higher. There’s no great catalyst, and if strong earnings reports aren’t enough to do it, what would be? That’s why everyone is closer to the sell button than the buy button,” said JJ Kinahan, chief strategist at TD Ameritrade.

“The economy is performing well, but there’s so much uncertainty that there’s no conviction to hold one sector over another. No one has conviction in their buying, which has an impact on confidence overall.”

Read: The stock market has no leader right now—here’s why that might be bad news

Don’t miss: Stock-market bulls lose hope as indexes trade in a tight range

Which economic data are in focus?

Jobless claims rose by 2,000 in the latest week, though they remained near multidecade lows. Separately, the productivity of American businesses rose 0.7% in the first quarter, but there’s little sign of long-term improvement in what’s been a weak link for the U.S. economy.

The Markit services purchasing managers index for April came in at 54.6, compared with 54 in March. The Institute for Supply Management’s nonmanufacturing index fell more than expected in April, dropping to 56.8, while factory orders rose 1.6% in the month.

Check out: MarketWatch’s Economic Calendar

Which stocks are in focus?

Tesla Inc. TSLA, -7.32% lost 7% on heavy volume. The electric-car maker beat expectations for adjusted losses and sales in its quarterly earnings, but shares dropped during a long conference call in which Chief Executive Elon Musk gave analysts and the media the cold shoulder. The stock is down 11% thus far this year.

Read: Elon Musk acted like a jerk, and Tesla stock paid the price

Kraft Heinz Co. KHC, +2.64%  shares rose 3.4% after topping Wall Street estimates.

FireEye Inc. FEYE, -7.01%  fell 4.5% even after the security software maker lifted its full-year guidance as sales beat forecasts.

Square Inc. SQ, -3.18%  dropped 1.6% after the payments company posted earnings and shed light on its spending plans and bitcoin business.

In its first report as a public company, Spotify Technology SA SPOT, -8.59%  reported an earnings miss. The digital music service company’s shares tumbled 9%.

New York Times Co. NYT, -4.24%  shares dipped 0.7% after it reported first-quarter earnings that beat expectations.

Fitbit Inc. FIT, -11.09%  fell 6.6% a day after the wearable-devices company beat earnings expectations but disappointed with its outlook.

World Wrestling Entertainment Inc. WWE, +3.14%  rose 2.5% after it reported its results.

After the markets close, companies including Herbalife Nutrition Ltd. HLF, -0.59% Activision Blizzard Inc. ATVI, -0.83% Xerox Corp. XRX, -3.73%  and GoPro Inc. GPRO, -1.34%  are expected to release their quarterly financial updates.

Don’t miss: Why the stock market is unimpressed by the best Q1 results in 24 years

What are other markets doing?

European stocks SXXP, -0.83% fell. Asian stocks were largely in the red, led by a 1.3% drop for Hong Kong’s Hang Seng Index HSI, -1.34%

Gold prices GCM8, +0.65%  were up 0.5%, while U.S. oil futures CLM8, -0.68%  rose 0.4%. The ICE U.S. Dollar Index DXY, -0.11% was slightly lower at 92.386.

Read: Global gold demand drops to lowest in a decade