Drop in Commodities Damps U.S. Stocks

U.S. stock indexes wavered Thursday, pressured by a steep drop in commodity prices.

Major stock indexes have climbed over the past few weeks as quarterly earnings results have pointed to health among U.S. corporations. The U.S. posted the biggest improvement in its revision ratio -- which measures the ratio of upward and downward earnings estimates by analysts -- of all regions in April, according to Bank of America Merrill Lynch.

Solid earnings could help stocks continue advancing, investors and analysts say, even as some have expressed concerns about recent weakness in inflation, consumer spending and economic growth.

"The earnings story is still very robust, and that's why investors have been able to look through some of the softer economic data," said Jason Draho, head of tactical asset allocation Americas at UBS Wealth Management.

The Dow Jones Industrial Average fell 22 points, or 0.1%, to 20935. The S&P 500 edged up less than 0.1%, and the Nasdaq Composite was down less than 0.1%.

The S&P 500 consumer staples sector rose 0.7% on Thursday, boosted by gains in shares of Kellogg. The cereal maker's stock jumped 2.2% after it posted quarterly earnings that beat expectations. Monster Beverage rose 2.8%, and General Mills added 1.9%.

Commodity prices slid across the board, putting pressure on shares of energy companies. U.S. crude oil for June delivery declined 4.8% to $45.52 a barrel, settling at its lowest level since November. Energy shares in the S&P 500 fell 1.7%, with Dow component Chevron falling 1.7%.

Metals slid amid concerns about Chinese demand for commodities such as steel and iron. Copper for May delivery fell 1.2% to $2.5020 a pound, its lowest settlement since January, while gold for May delivery slid 1.6% to $1226.50 an ounce in its biggest one-day slide since December.

Government bonds slipped Thursday, with the yield on the 10-year U.S. Treasury note rising to 2.352%, according to Tradeweb, from 2.309% on Wednesday. Yields rise as bond prices fall.

Elsewhere, the Stoxx Europe 600 rose 0.7%, closing at its highest level since August 2015, after a measure of activity in the eurozone's manufacturing and services sectors rose to a six-year high and retail sales figures improved.

"For the first time since the European sovereign debt crisis broke out, we have a synchronized economic upswing in almost all continental European economies," said Frank Engels, head of multi-asset portfolios at Union Investment.

The Shanghai Composite Index fell 0.3%, ending lower for a third straight session, after a measure of service-sector activity in China hit its lowest level in nearly a year for April.

"I don't see catastrophe, but I do think there's a lot of complacency in emerging-market assets around China," said Tina Byles Williams, chief investment officer and chief executive at FIS Group.

South Korean equities powered to record highs, adding 1% Thursday, while Japan's markets were closed for a holiday.

Write to Akane Otani at akane.otani@wsj.com and Riva Gold at riva.gold@wsj.com

The S&P 500 inched higher Thursday, as gains in shares of consumer companies offset a slide in the energy sector.

Major indexes have climbed over the past few weeks as quarterly earnings results have pointed to health among U.S. corporations. The U.S. posted the biggest improvement in its revision ratio -- which measures the ratio of upward and downward earnings estimates by analysts -- of all regions in April, according to Bank of America Merrill Lynch.

Solid earnings could help stocks continue advancing, investors and analysts say, even as some have expressed concerns about recent weakness in inflation, consumer spending and economic growth.

"The earnings story is still very robust, and that's why investors have been able to look through some of the softer economic data," said Jason Draho, head of tactical asset allocation Americas at UBS Wealth Management.

The Dow Jones Industrial Average fell 6.43 points, or less than 0.1%, to 20951.47. The S&P 500 edged up 1.39 points, or less than 0.1%, to 2389.52 and the Nasdaq Composite rose 2.79 points, or less than 0.1%, to 6075.34.

The S&P 500 consumer staples sector rose 0.8% on Thursday, boosted by a rise in Kellogg shares. The cereal maker's stock jumped $1.46, or 2.1%, to $70.40 after it posted quarterly earnings that beat expectations.

Commodity prices slid across the board, putting pressure on shares of energy companies. U.S. crude oil for June delivery declined 4.8% to $45.52 a barrel, settling at its lowest level since November. Energy shares in the S&P 500 fell 1.9%, with Dow component Chevron falling 1.91, or 1.8%, to 104.81.

Metals slid amid concerns about Chinese demand for commodities such as steel and iron. Copper for May delivery fell 1.2% to $2.5020 a pound, its lowest settlement since January, while gold for May delivery slid 1.6% to $1226.50 an ounce in its biggest one-day slide since December.

Government bonds slipped Thursday, with the yield on the 10-year U.S. Treasury note rising to 2.354% from 2.309% on Wednesday. Yields rise as bond prices fall.

The Stoxx Europe 600 rose 0.7%, closing at its highest level since August 2015, after a measure of activity in the eurozone's manufacturing and services sectors rose to a six-year high and retail sales figures improved.

The Shanghai Composite Index fell 0.3%, ending lower for a third straight session, after service-sector activity in China hit its lowest level in nearly a year for April.

South Korean equities powered to fresh highs, adding 1% Thursday, while Japan's markets were closed for a holiday.

Write to Akane Otani at akane.otani@wsj.com and Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

May 04, 2017 17:22 ET (21:22 GMT)