Facebook, Tesla fall sharply, offsetting Fed optimism
U.S. stock benchmarks on Thursday were switching between small gains and losses, as the energy sector tumbled in sync with a drop in crude oil. Meanwhile, a House panel took a step to begin rolling back Dodd-Frank reforms and Obamacare.
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The Dow Jones Industrial Average , which had traded down by as many as 110 points, earlier in the session, was down 12 points, or less than 0.1%, to 20,938.
The S&P 500 index , was trading flat at 2,388, as six of its 11 sectors were in positive territory, led by gains in consumer-staples and health-care shares. The broad-market index had been down as many as 8 points.
The technology-laden Nasdaq Composite Index was little-changed at 6,075, following an 18-point deficit earlier in the session.
Thursday's trade was marked by choppy action, which intensified intraday as investors sold energy stocks and closely watched a pair of important legislative votes Capitol Hill.
The House Financial Services panel voted to begin rolling back provisions of the Dodd-Frank financial reforms (http://www.marketwatch.com/story/house-panel-passes-republican-measure-gutting-dodd-frank-reforms-2017-05-04). Later in the day, the House of Representatives voted to replace the Affordable Care Act (http://www.marketwatch.com/story/how-republicans-plan-to-vote-on-the-health-bill-which-wont-be-scored-by-cbo-2017-05-04), also known as "Obamacare." One Republican senator, however, said the bill had "zero chance" (http://www.marketwatch.com/story/republican-senator-says-house-may-pass-health-bill-but-the-legislation-has-0-chance-in-senate-2017-05-04) of passage in the Senate.
Energy shares weighed on the broader market, with the sector (XLE) down 2.3%, falling sharply alongside a 4.5% drop in crude oil , which took prices to their lowest level since November (http://www.marketwatch.com/story/oil-prices-sink-to-lowest-levels-since-november-2017-05-04).
Crude sank on expectations for a recovery in Libyan production, along with rising U.S. output, both of which would add to the market's persistently high levels of supply. Among the most active names, Exxon Mobil Corp.(XOM) shares fell 1.4%, ConocoPhillips(COP) lost 2.3% and Occidental Petroleum Corp. (OXY) shed 2.6%.
"Oil has been in correction mode, which is weighing on the market. Futures had been higher because of positive sentiment here and in Europe, but the energy weakness changed that," said Steve Sosnick, equity-risk manager at Timber Hill/Interactive Brokers Group.
In corporate news, Facebook Inc.(FB), one of the largest U.S. companies by market capitalization, fell 1% despite posting better-than-expected (http://www.marketwatch.com/story/facebook-shares-rise-after-first-quarter-revenue-beat-2017-05-03) earnings and revenue late Wednesday. The drop was seen as related to the stock's recent outperformance; it is up nearly 30% thus far this year.
"Valuations are lofty, but companies are mostly delivering what people had been expecting, and those [analyst] estimates were pretty high to begin with. That is why we continue to muddle around these high levels in the market," said Sosnick.
On Wednesday, the Federal Reserve deemed recent weakness ion economic reports as " likely to be transitory," deploying unusually dismissive language (http://www.marketwatch.com/story/fed-holds-interest-rates-steady-dismisses-first-quarter-slump-as-transitory-2017-05-03). The Fed also left interest rates unchanged, as had been widely expected.
Equities had also been supported by an apparent easing of geopolitical tensions abroad, with European stocks higher after markets-friendly French presidential candidate Emmanuel Macron (http://www.marketwatch.com/story/emmanuel-macron-5-things-to-know-about-the-man-poised-to-be-frances-president-2017-04-24) weathered a televised debate Wednesday night and appeared to remain on track to win in Sunday's runoff election against euroskeptic Marine Le Pen.
See:Brace for market mayhem if Le Pen unexpectedly wins French presidency (http://www.marketwatch.com/story/brace-for-market-mayhem-if-le-pen-unexpectedly-wins-french-presidency-2017-05-04)
Europe's main stock benchmark finished at a 52-week high (http://www.marketwatch.com/story/european-stocks-flirt-with-almost-21-month-high-after-earnings-deluge-2017-05-04).
Economic news: In the latest economic data, first-time jobless claims fell sharply in the latest week (http://www.marketwatch.com/story/us-jobless-claims-fall-sharply-in-latest-week-2017-05-04), dropping a larger-than-expected 19,000 in the latest sign of strength in the labor market. Separately, U.S. productivity fell 0.6% in the first quarter (http://www.marketwatch.com/story/us-productivity-slumps-in-first-quarter-2017-05-04); analysts had forecast no change.
There are no Fed officials scheduled to speak today.
Individual movers:Tesla Inc.(TSLA) lost 4.9% after the maker of electric cars late Wednesday revealed a wider-than-expected adjusted loss (http://www.marketwatch.com/story/tesla-shares-higher-after-wider-loss-revenue-beat-2017-05-03), though its quarterly revenue beat forecasts.
Read: Elon Musk says robot software will make Tesla worth as much as Apple (http://www.marketwatch.com/story/elon-musk-robot-software-will-make-tesla-worth-as-much-as-apple-2017-05-04)
Dunkin' Brands Group Inc.(DNKN) rose 0.5% after the doughnuts seller posted (http://www.marketwatch.com/story/dunkin-brands-falls-15-premarket-after-revenue-miss-2017-05-04) a larger-than-expected rise in adjusted profit, but weaker-than-anticipated revenue.
Avon Products Inc.(AVP) reported a surprise loss (http://www.marketwatch.com/story/avon-products-reports-surprise-loss-while-sales-rise-as-expected-2017-05-04), sending shares down 19%.
Other markets:Gold futures (http://www.marketwatch.com/story/gold-tumbles-1-after-fed-signals-confidence-in-the-us-economy-2017-05-04) tumbled 1.6% to settle at $1,228.60, their lowest settlement since mid-March.
See:Why now may be a good time to buy gold and silver (http://www.marketwatch.com/story/why-now-may-be-a-good-time-to-buy-gold-and-silver-2017-05-03)
And read:Gold investment demand falls 34%, but WGC says it was still 'robust' (http://www.marketwatch.com/story/gold-investment-demand-falls-34-but-wgc-says-it-was-still-robust-2017-05-04)
Asian markets finished mostly with losses, though Korea's benchmark scored a record close (http://www.marketwatch.com/story/record-high-for-korean-stocks-as-other-asian-markets-slip-2017-05-03). A key dollar index edged down 0.4%.
--Victor Reklaitis in London contributed to this article.
(END) Dow Jones Newswires
May 04, 2017 14:50 ET (18:50 GMT)