U.S. stocks ended lower on Thursday, with consumer staples, real estate and technology shares leading the losses.
Investors continued to digest a mixed bag of corporate earnings. While results have largely come in ahead of expectations thus far, there have been some disappointments, and others haven’t produced the kind of blowout results seen necessary to continue pushing shares higher from elevated levels.
Stocks extended their decline as Treasurys sold off, pushing the yield on the 10-year note /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +0.09% toward a 2018 high. Stocks closed off the lows after a news report said that President Donald Trump was told that he isn’t a target of the probe being conducted by Special Counsel Robert Mueller into whether Trump’s campaign team colluded with Russia in the run-up to the 2016 presidential election.
What are the main benchmarks doing?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.55% closed 83.18 points, or 0.3%, lower at 24,664.89, with the day’s decline pushing the blue-chip average back into negative territory for the year.
The S&P 500 /zigman2/quotes/210599714/realtime SPX +0.75% lost 15.51 points, or 0.6%, to end at 2,693.13, with nine of the 11 primary S&P 500 sectors closing in negative territory.
Financials and energy shares were the only industry groups closing in the green. Financials rallied 1.5%.
The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +1.13% fell 57.18 points to end at 7,238.06, a decline of 0.8%.
What’s driving markets?
First-quarter earnings reports have grabbed investors’ attention this week, with Netflix Inc. /zigman2/quotes/202353025/composite NFLX +0.60% , Goldman Sachs Group Inc. /zigman2/quotes/209237603/composite GS -0.51% and UnitedHealth Group Inc. /zigman2/quotes/210453738/composite UNH +0.92% among the companies that have posted encouraging results.
The S&P 500 components are expected to see earnings growth of 17.3% for the period, the fastest rate of expansion since 2011. The results have been enough to largely overshadow uncertainties such as trade policy questions and tensions over Syria.
What are strategists saying?
“It is clear that investors would prefer their president not being involved in an investigation over collusion with Russia,” said Diane Jaffee, senior portfolio manager at TCW, referring to the market’s ability to trim losses ahead of the closing bell.
Some analysts suggested that investors are beginning to anticipate a turn in the business cycle.
“There’s a growing fear that the good news we’ve seen over the past years is coming to an end, that we’re closer to a meaningful downturn in the economy than we had previously been expecting,” said Peter Kenny, senior market strategist at Global Markets Advisory Group.
Which stocks are in focus?
Shares in tobacco giant Philip Morris International Inc. /zigman2/quotes/201611010/composite PM +0.18% tumbled 16% after the company posted weaker-than-expected revenue, along with a stronger-than-anticipated adjusted profit. The stock was on track for its biggest one-day percentage decline since being spun off from Altria Group Inc. /zigman2/quotes/208895754/composite MO +1.06% in 2008. Altria fell 6%.