MARKET SNAPSHOT: Stock Market Struggles To Break Higher, With All Eyes On Comey Testimony
U.K. election and ECB meeting are all on deck Thursday
U.S. stock-index benchmarks on Thursday morning fought to gain traction higher, as investors focused on testimony from former FBI Director James Comey in front of the U.S. Senate Intelligence Committee.
The Dow Jones Industrial Average climbed 21 points, or 0.1%, at 21,195. The blue-chip gauge fleetingly traded above its most recent closing high, hitting 21,112.77 in intraday trade before pulling back. Goldman Sachs Group Inc. (GS) and J.P. Morgan Chase & Co. shares led the index, contributing about 30 points to its advance.
The S&P 500 index traded flat at 2,433, capped by a sharp drop of at least 1% in real-estate and utilities shares.
Meanwhile, the Nasdaq Composite Index touched an intraday record of 6,311.89, but was most recently trading at break-even levels at 6,293.
Comey's testimony is part a litany of potentially market-moving events playing out over the next 24 hours. Those include a European Central Bank--which kept its monetary policy unchanged on Thursday--and a U.K. snap election.
However, Wall Street investors were signaling that events don't appear to threaten the stock market's recent trade near record territory, which has been driven higher by Trump's pro-market agenda, including promises of tax cuts, infrastructure spending and deregulation. Although, hopes for those cuts soon have been greatly diminished by the White House drama.
"Testimony would have to be really, really damning enough to throw all of [Trump's policy promises] into the trash bin, and that's not what we have right now in this [Comey] testimony," said Mike Antonelli, chief equity sales trader at Robert W. Baird & Co.
(http://blogs.marketwatch.com/thetell/2017/06/08/mario-draghi-live-blog-ecb-drops-reference-to-potential-for-further-rate-cut/)Read:What to watch when James Comey testifies to the Senate on Thursday (http://www.marketwatch.com/story/what-to-watch-when-james-comey-testifies-to-the-senate-on-thursday-2017-06-05).
Comey's prepared testimony, released Wednesday, suggests he was worried President Donald Trump had sought to secure his "loyalty" and wanted him to help "lift the cloud" the investigation into possible Russian interference in the U.S. election was casting. Comey also confirmed the president's assertion that the director had repeatedly assured Trump that the FBI hadn't opened an investigation into him. He reiterated those assertions during his testimony in front of the Senate panel.
Phil Orlando, chief equity strategist at Federated Investors, said barring any coming surprises recent events suggests that the stock market should drift higher.
"Ultimately, stock markets are going to reflect earnings," he said. Orlando said the U.S. and Europe are showing strong quarterly results that may help to support gains in stocks that some strategists and investors view as overvalued.
Earlier in the day, the ECB, as expected, left interest rates unchanged (http://www.marketwatch.com/story/ecb-leaves-policy-unchanged-drops-reference-to-lower-rates-2017-06-08) Thursday but said it continued to expect interest rates "to remain at present levels for an extended period of time, and well past the horizon" of its asset-buying program, which is set to run at least through December. In previous statements, the ECB had said it expected rates "to remain at present or lower levels for an extended period of time."
Check out: A recap of the ECB's Mario Draghi press conference (http://blogs.marketwatch.com/thetell/2017/06/08/mario-draghi-live-blog-ecb-drops-reference-to-potential-for-further-rate-cut/)
Draghi said during a news conference following the updated policy statement that the risk facing Europe were "broadly balanced," suggesting growing optimism about the eurozone's economic outlook., but though the language of the ECB's policy statement appeared to crack the door to so-called normalization by the central bank, Draghi tried to avoid such a characterization during the news conference.
Investors also were focused on the U.K. general election, beyond the ECB and Comey.
See:Comey's juicy Trump account leaves some big questions unanswered (http://www.marketwatch.com/story/comeys-juicy-trump-account-leaves-some-big-questions-unanswered-2017-06-07)
Read:Why the ECB can take only 'baby steps' toward ending ultraloose monetary policy (http://www.marketwatch.com/story/draghis-ecb-may-take-baby-steps-toward-ending-ultraloose-monetary-policy-2017-06-06)
In the U.K., voters headed to the polls in an election that turned out to be much more uncertain than anyone had predicted. Opinion polls are still giving Prime Minister Theresa May's Conservative Party the lead, but the big question is whether the party will increase its majority in parliament. Polling stations close at 10 p.m. London time (http://www.marketwatch.com/story/when-is-the-uk-election-and-when-do-we-know-who-won-2017-06-01), or 5 p.m. Eastern, and the first exit polls will be released immediately after.
Read:U.K. election--these are the stocks and sectors to watch once the result is in (http://www.marketwatch.com/story/watch-for-a-shake-up-among-uk-stocks-after-thursdays-election-2017-06-06)
(http://www.marketwatch.com/story/watch-for-a-shake-up-among-uk-stocks-after-thursdays-election-2017-06-06) (http://www.marketwatch.com/story/watch-for-a-shake-up-among-uk-stocks-after-thursdays-election-2017-06-06)Also read:U.K. election: The worst, best and most likely scenarios for stocks world-wide (http://www.marketwatch.com/story/uk-election-the-nightmare-best-case-and-most-likely-scenarios-for-stocks-worldwide-2017-06-01)
The pound traded at a two-week high as voting got under way, buying $1.2943, compared with $1.2960 late Wednesday in New York.
Economic news: A reading on weekly jobless claims dropped by 10,000 to 245,000 (https://www.dol.gov/ui/data.pdf)in the seven days stretching from May 28 to June 3, hanging around the lowest levels in decades (http://www.marketwatch.com/story/us-jobless-claims-drop-10000-to-245000-2017-06-08)and suggesting that the labor market continues to chug along.
Stock movers: Shares of Yahoo! Inc.(YHOO) climbed 8% after news late Wednesday that up to 1,000 layoffs are expected at the combined Yahoo and AOL companies set to be bought by Verizon Communications Inc.(VZ).
Advanced Micro Devices Inc. (AMD) gained 1.8% as shares build on recent days' sharp rally (http://www.marketwatch.com/story/amds-stock-extends-surge-fueled-by-tremendous-graphics-cards-demand-2017-06-07) following upbeat comments from Apple Inc. (AAPL) and brokers regarding the chip maker.
Shares of Alibaba Group Holding Ltd.(BABA) jumped nearly 10% after the Chinese e-commerce giant said revenues are expected to grow between 45% and 49% in 2018.
Shares of Nordstrom Inc. (JWN) soared 11% following reports that the retailer is exploring taking itself private.
Other markets: Stocks in Asia closed mostly higher (http://www.marketwatch.com/story/asian-markets-sit-back-wait-for-global-news-to-pass-2017-06-07), although Japan's Nikkei 225 index bucked the positive trend. The losses in Tokyo came after the yen jumped on reports the Bank of Japan is running simulations of exits from quantitative easing.
European stocks were little changed (http://www.marketwatch.com/story/european-stocks-search-for-firm-footing-with-ecb-uk-election-on-deck-2017-06-08) ahead of the ECB meeting and the U.K. election result.
Oil prices bounced around (http://www.marketwatch.com/story/crude-futures-attempt-to-rebound-from-biggest-drop-in-a-month-2017-06-08), after posting the biggest drop since March in Wednesday's session. That slump followed a report of an unexpected climb in U.S. stockpiles.
Gold tumbled 1.2%, while the dollar was up 0.2% against other major currencies.
(END) Dow Jones Newswires
June 08, 2017 12:02 ET (16:02 GMT)