The Dow Jones Industrial Average logged its third record close of the week Thursday, even as other major U.S. indexes edged slightly lower.
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Stocks hovered between small gains and losses for much of the day, marking a pause after the Dow industrials, S&P 500 and Nasdaq Composite closed at records together two consecutive sessions in a row.
Tensions between the U.S. and North Korea have eased somewhat, and political gridlock in Washington has appeared to ease, helping stocks generally move higher this week.
Still, some investors said they are avoiding new bets while they wait for clarity on a number of potential risks -- including signs of rising inflation, a coming Republican tax proposal and the start of the next earnings season.
"The market continues to hit all-time highs, yet there are a myriad of excuses for it to sell off," said Michael Scanlon, a portfolio manager at Manulife Asset Management. "Until we get to the next earnings season and see a draft of the tax proposal, markets may cool."
The Dow industrials rose 45 points, or 0.2%, to 22203. The S&P 500 declined 0.1%, while the Nasdaq Composite fell 0.5%.
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United Technologies and Boeing were among the biggest contributors to the Dow industrials' climb, adding roughly 36 points to the index on Thursday.
Shares of United Technologies rose 2.6% after The Wall Street Journal reported that questions are surfacing over how antitrust authorities will treat its deal for Rockwell Collins. Boeing extended Wednesday's gains, rising 1.4%, after it increased 2019 production estimates for its 787 Dreamliner passenger jet.
Brick-and-mortar retail stocks weighed on the S&P 500, with Tiffany and Under Armour among the index's biggest laggards.
Investors proceeded to buy up shares of hard-hit energy companies, putting the S&P 500 energy sector, up 0.4%, on pace for its best week since September 2016. U.S. crude has rebounded this week as data have pointed to falling global oil supplies and stronger demand.
Many investors continue to debate the durability of the market's run, with some arguing strong earnings and economic growth will continue to support stocks, and others saying the rally's length makes them nervous. Future interest-rate hikes could add to volatility in the stock market, investors and analysts said.
"We're entering more and more into an environment where you may want to avoid passive investments," said Tom Stringfellow, chief investment officer of Frost Investments. "The risk is there, which could be a larger-than-expected rate hike or some significant geopolitical event."
Investors' expectations for an interest-rate increase jumped Thursday after data showed U.S. consumer prices rose last month by the most since January.
Federal-funds futures, used by investors to place bets on the Fed's rate-policy outlook, showed Thursday a roughly 53% chance of a rate increase by the end of the year, up from 31% a week ago, according to data from CME Group. Muted inflation readings throughout the year have made many investors question the Fed's plans to move forward with normalizing monetary policy.
"We're at a tossup where a rate hike could happen in December," said Jason Draho, head of tactical asset allocation Americas for UBS Group's U.S. wealth-management arm.
The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was down 0.2%.
Government bonds edged lower, with the yield on the benchmark 10-year U.S. Treasury note at 2.199% according to Tradeweb, compared with 2.194% on Wednesday. Yields rise as bond prices fall.
Elsewhere, the Stoxx Europe 600 edged up 0.1%, while stocks in Asia mostly finished lower after disappointing economic data from China.
--Marina Force contributed to this article.
Write to Michael Wursthorn at Michael.Wursthorn@wsj.com
(END) Dow Jones Newswires
September 14, 2017 16:26 ET (20:26 GMT)