Dow's win streak in jeopardy
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U.S. stocks fell on Thursday as weak technology shares weighed following disappointing results from Cisco Systems Inc. and a lackluster performance in a Wal-Mart Stores unit.
The Dow Jones Industrial Average dropped 74 points, or 0.4%, to 21,945. The S&P 500 shed 10 points, or 0.4%, to 2,457, and the tech-heavy Nasdaq Composite Index skidded 41 points, or 0.7%, to 6,303. All three benchmarks were off their lows of the day, however.
Still, the market trimmed its decline with the Dow bouncing back from a 100-point loss as the backdrop for equities generally remain positive. The Dow is coming off a four-day string of gains has risen in 14 of the past 18 trading days.
Read:This is the 'wall of worry' that stocks have climbed to rally 271% (http://www.marketwatch.com/story/this-is-the-wall-of-worry-that-stocks-have-climbed-to-rally-271-since-2009-2017-08-16)
Cisco (CSCO) lost 3.6% after the networking-equipment company late Wednesday reported earnings that missed forecasts (http://www.marketwatch.com/story/cisco-shares-fall-after-company-predicts-another-drop-in-sales-2017-08-16) and predicted a drop in revenue next quarter. The stock was one of the biggest decliners in the S&P 500, and pressured the tech sector, which dropped 0.9% on the day as the market's biggest industry decliner.
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Separately, retail giant Wal-Mart Stores Inc. (WMT) fell 1.8% after its results, which included lower-than-expected sales from its Sam's Club division (http://www.marketwatch.com/story/wal-mart-earnings-revenue-beat-estimates-2017-08-17). Thursday marked the biggest one-day percentage drop for the stock since June, though it remains up 13% for the year, ahead of the broader market.
"Cisco is in the midst of a turnaround, and it is showing very slow progress in that, while Wal-Mart has had something like 12 straight quarters of revenue growth, which led to expectations getting a little ahead of themselves. They're just taking a little bit of a step back, and so is the market," said Mark Spellman, portfolio manager at Alpine Funds, which has a total of $3.8 billion in assets.
"Ultimately I think the trends in the market remain constructive: the dollar is low, overseas economies are growing, and when I look for things that would get me worried I don't see them occurring."
The day's losses were broad, with 10 of the 11 primary S&P 500 sectors in the red. The only group to rise, real estate, was up 0.2%.
The equity market was also digesting minutes from the Federal Reserve's July meeting, as well as President Donald Trump's disbanding a pair of his business advisory panels (http://www.marketwatch.com/story/trump-business-councils-disband-amid-wave-of-ceo-exits-2017-08-16), which underscores the president's challenges in promoting his Wall Street-friendly policies.
Trump has faced a furor after he repeatedly blamed "both sides" for violence last weekend at a white-supremacist rally in Charlottesville, Va.
Overall, Fed minutes were read as dovish, lowering expectations of another rate increase this year.
"There's no direct market impact in what Trump has done recently, but if things continue to be so polarized that his agenda is completely dead on arrival, that would have a negative impact," Spellman said.
Fed in focus: The dollar rebounded a little on Thursday, with the ICE Dollar Index edging up 0.1%. The greenback had declined Wednesday after Fed minutes from the July meeting (http://www.marketwatch.com/story/fed-eyes-september-debt-drawdown-some-want-patient-on-rates-2017-08-16) suggested the central bank is worried about sluggish inflation.
"This kind of uncertainty leads to fresh doubts over whether the Fed will be able to raise rates again this year and clearly investors are growing more nervous," said Konstantinos Anthis, researcher at ADS Securities in a note.
"Looking ahead, the dollar's price action might be dictated by any fresh news on the North Korea front as President Trump is rumored to have asked his military advisers about credible military options," he added.
Read:Trump agrees to seek Seoul's OK before any action on North Korea, says President Moon (http://www.marketwatch.com/story/trump-agrees-to-seek-seouls-ok-before-any-action-on-north-korea-says-president-moon-2017-08-17)
Economic news: Initial jobless claims in the period running from Aug. 6 to Aug. 12 declined by 12,000 to 232,000, the Labor Department said Thursday.
Philly Fed's manufacturing index (http://www.marketwatch.com/story/philadelphia-fed-factory-gauge-eases-but-hints-at-future-strength-in-august-2017-08-17) for August came in at 18.9, compared with a reading of 17.0 expected by economists polled by MarketWatch and 19.5 in the prior period.
A reading of industrial production missed expectations, rising by 0.2% in July, compared with expectations for a rise of 0.3% and 0.4% gain in the prior month.
See:MarketWatch's economic calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
Stock movers:Alibaba Group Holding Ltd.(BABA) jumped 4.4% after the Chinese e-commerce giant reported earnings and sales above expectations (http://www.marketwatch.com/story/alibabas-stock-jumps-after-profit-revenue-rise-above-expectations-2017-08-17).
L Brands Inc. (LB) slumped 10% after the Victoria's Secret parent late Wednesday cut its forecast (http://www.marketwatch.com/story/victorias-secret-parent-l-brands-shares-fall-after-company-cuts-full-year-view-2017-08-16) for third-quarter and full-year earnings. The stock was the biggest percentage decliner on the S&P.
NetApp Inc.(NTAP) fell 5.9% despite reporting earnings that came in ahead of expectations (http://www.marketwatch.com/story/data-storage-company-netapp-shares-edge-up-on-first-quarter-earnings-beat-2017-08-16). The stock has gained nearly 40% over the past 12 months.
(http://www.marketwatch.com/story/wal-mart-earnings-some-analysts-say-traffic-has-fallen-others-say-it-has-grown-2017-08-14)After the market closes, Gap Inc.(GPS), Ross Stores Inc.(ROST), and Applied Materials Inc.(AMAT) are expected to report.
Other markets:Asia markets closed mixed (http://www.marketwatch.com/story/asian-stocks-broadly-bounce-higher-on-tech-gains-2017-08-16) as investors there digested the Fed minutes while European markets (http://www.marketwatch.com/story/european-stocks-veer-lower-as-fed-rate-hike-doubts-hurt-bank-shares-2017-08-17) were broadly lower after a three-day winning streak.
Oil prices (http://www.marketwatch.com/story/oil-prices-rebound-after-eia-fueled-selloff-2017-08-17) remained pressured after data Wednesday showed U.S. oil production has jumped to a more than two-year high. Most metals prices, including , traded in positive territory.
--Sara Sjolin and Mark DeCambre contributed to this report.
(END) Dow Jones Newswires
August 17, 2017 11:36 ET (15:36 GMT)