Stocks Retreat From Highs on Disappointing Earnings
U.S. stock indexes pulled back Thursday, as disappointing earnings reports dragged shares of consumer-discretionary companies lower.
Major indexes initially headed toward one of their biggest declines of the month as retail stocks slid, but pared losses heading into the afternoon.
While individual stocks have swung in response to corporate earnings reports, stock indexes have barely budged in recent sessions, something some investors attribute to data broadly pointing to the U.S. economy being on solid footing.
"Investors are more willing to move into the market, and less skittish to downturns," said Brad McMillan, chief investment officer at Commonwealth Financial Network.
The Dow Jones Industrial Average fell 49 points, or 0.2%, to 20895 on Thursday. The S&P 500 lost 0.4%, and the Nasdaq Composite shed 0.4%.
Consumer-discretionary shares in the S&P 500 fell 0.7%, one of the worst-performing sectors in the broad index, after retail giants including Macy's and Kohl's posted tepid quarterly results. Shares of Macy's shed 15% after the firm reported a bigger-than-expected slide in revenue for the first quarter, while Kohl's, which said same-store sales fell more than expected, lost 6%.
Technology shares, one of the best performers in the stock market this year, fell 0.4% in the S&P 500. Shares of Snapchat parent Snap plunged 20% after the company said Wednesday afternoon that it was struggling to maintain strong user growth.
Even with several companies reporting worse-than-expected quarterly results this week, the S&P 500 is on track to post 13% year-over-year earnings growth for the first quarter, according to FactSet.
"You have your normal first-quarter seasonal issues," said David Donabedian, chief investment officer of CIBC Atlantic Trust Private Wealth Management, who cited the weaker-than-expected GDP reading for the first quarter, "but generally, the first-quarter earnings season gave equities a good boost."
Government bonds edged higher Thursday, with the yield on the 10-year U.S. Treasury note slipping to 2.407%, according to Tradeweb, from 2.414% Wednesday. Yields fall as bond prices rise.
Elsewhere, the British pound was down 0.5% against the U.S. dollar at $1.2882 after the Bank of England kept its rates unchanged on Thursday and forecast steady growth for the U.K. in the coming years, as long as it exits from the European Union smoothly.
The Stoxx Europe 600 slid 0.5%, weighed down by declines in shares of banks, oil-and-gas companies and technology firms.
Earlier, Japan's Nikkei Stock Average rose 0.3% and Hong Kong's Hang Seng Index added 0.4%, with both indexes finishing at their highest levels since 2015. South Korea's Kospi climbed 1.2% to a fresh closing record.
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(END) Dow Jones Newswires
May 11, 2017 13:06 ET (17:06 GMT)