Stocks Pull Back From All-Time Highs on Disappointing Earnings

Stocks pulled back from record levels Thursday amid disappointing earnings reports, while the British pound came under pressure after an update from the Bank of England.

The Dow Jones Industrial Average slipped 25 points, or 0.1%, to 20918 shortly after the opening bell. The S&P 500 fell 0.2% from a record high as first-quarter company reports missed analysts' forecasts, while the Nasdaq Composite dropped 0.3%.

Shares of Snap tumbled 22% after its first quarterly report as a public company showed it struggled to maintain user growth.

"Its results weren't dramatically worse than people were expecting," said Markus Stadlmann, chief investment officer at Lloyds Private Bank. "If companies like Snap don't deliver on growth expectations, these stocks get punished very quickly and hard."

Shares of technology companies had led gains in U.S. stocks so far this year by a wide margin, with the Nasdaq Composite Index closing at a record high for four consecutive sessions.

"I think tech stocks will continue to be a sector rich in opportunity, but you probably have to be more selective than anywhere else," Mr. Stadlmann said.

Shares of Macy's fell 9.2% after the retailer missed earnings and sales expectations, while Whole Foods Market added 4.6% after the grocery chain said it would dramatically reshape its board.

While shares have moved individually in response to earnings, U.S. stock indexes have barely budged in recent sessions, hovering around all-time highs just as volatility has collapsed.

"Right now, there's a sense that things are pretty good economically and from an earnings perspective, and that should continue" said Brad McMillan, chief investment officer at Commonwealth Financial Network. "Investors are more willing to move into the market, and less skittish to downturns."

Among clients, "we're starting to see retail investors wanting to take more risk," he added.

Elsewhere, the Stoxx Europe 600 fell 0.4%, and the British pound was down 0.6% at $1.2857 after the Bank of England kept its rates unchanged in a 7-1 vote on Thursday and forecast steady growth for the U.K. in the coming years, as long as it exits the European Union smoothly.

"A lot of people were looking for a potential second dissenter [on a rate rise]," said Tim Graf, head of macro strategy for EMEA at State Street Global Markets, noting some investors were also likely reacting to the BOE's modest tweaks to its growth and inflation forecasts.

Still, on the whole, "I don't look at this as a major shift," he said.

In Europe, media, telecoms and utilities companies led declines, with shares of Spanish telecommunications giant Telefónica and the U.K.'s BT Group lower after releasing earnings figures. Shares of UniCredit climbed, however, after the Italian lender posted a first-quarter net profit after a large fourth-quarter loss.

Miners and oil-and-gas companies outperformed the rest of the market as oil and metals prices recovered. Crude prices logged their biggest daily gains since December on Wednesday, and Brent crude oil added an additional 1.4% to $50.91 a barrel on Thursday. Copper futures climbed 1.7% to $5,601 a ton, while gold rose 0.3% to $1,223 an ounce.

Earlier, Japan's Nikkei Stock Average rose 0.3% and Hong Kong's Hang Seng Index added 0.4%, with both bourses finishing at their highest levels since 2015. South Korea's Kospi climbed 1.2% to a record. The Shanghai Composite added 0.3%, recovering from earlier losses that sent it to a seven-month low.

In currencies, the New Zealand dollar fell sharply against the greenback after a central-bank policy statement was interpreted as dovish. The euro edged down 0.2% to $1.0848, while WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was up 0.1%.

10-year U.S. Treasury yields slipped to 2.406% from 2.414%, paring earlier losses after a gauge of U.S. business prices rose more than expected in April and data showed the number of Americans applying for first-time unemployment benefits fell last week.

Kenan Machado,

Yifan Xie

, Paul Hannon, Georgia Wells and P.R. Venkat contributed to this article.

Write to Riva Gold at

(END) Dow Jones Newswires

May 11, 2017 09:54 ET (13:54 GMT)