U.S. stocks paused Thursday after two days of strong gains as crude prices retreated from the $50 a barrel level and investors brushed off better-than-expected economic reports.
Orders for durable goods manufactured in the U.S. jumped in April, fueled by higher demand for new cars, trucks and commercial jets. But a key measure of business investment fell again. Meanwhile, jobless claims fell to a one-month low last week, suggesting the labor market remained robust.
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A gauge of pending home sales jumped in April, rising to the highest since February 2006. Sales of new and existing homes also surged in April, a sign that builders are stepping up construction as demand for housing remains robust.
The Dow Jones Industrial Average was off by 30 points, or 0.2%, to 17,821, following a 359-point rally over the previous two sessions. The S&P 500 pulled back 1 point to 2,089, weighed down by the financials and materials sectors.
The Nasdaq Composite , which fluctuated between slight gains and losses, was last up 1 point at 4,896.
"While we saw a nice rally over the past few days, and it appeared the market is signalling that it can handle rate hikes, I would question whether this rally is sustainable, because earnings growth is still negative," said Karyn Cavanaugh, market strategist at Voya Investment Management.
Brent crude briefly rose above $50 a barrel on Thursday for the first time in six months, and West Texas Intermediate crude also has briefly traded above the $50 mark.
WTI futures slipped 7 cents to $49.49 a barrel.
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Individual movers:Dollar Tree Inc.(DLTR) shares jumped 13% after the discount retailer boosted its outlook, while Dollar General Corp.(DG) shares rose 4.8% even as adjusted quarterly profit missed forecasts, with revenue topping expectations.
HP Inc.(HPQ) shares rose 5.6% after the PC and printer maker reported quarterly results late Wednesday.
PVH Corp.(PVH) shares rose 5.3% after the Calvin Klein parent company raised its guidance for the year.
Signet Jewelers Ltd.(SIG) posted adjusted quarterly profit that beat, but revenue missed. Shares fell 7.8%.
Abercrombie & Fitch Co.(ANF) shares sank 18% as the retailer's same-store sales fell 4% and its quarterly loss was bigger than expected.
Costco Wholesale Corp.(COST) revealed late Wednesday that its sales stagnated in its third quarter, but shares were up 3.8%.
Other markets:European stocks have been trading slightly higher, and most Asian markets closed with modest gains. Gold futures advanced, and a key dollar index inched lower.
Economic news: Japanese Prime Minister Shinzo Abe on Thursday reportedly warned that the commodities selloff in the last two years could indicate another global financial crisis is coming.
Pending home sales for April jumped 5.1% to their highest level since February 2006, soundly topping an expected 0.8% increase.
On the Federal Reserve front, Fed Gov. Jerome Powell said at the Peterson Institute for International Economics in Washington, D.C. that a hike in interest rates hike may come soon but weak productivity will curb further hikes.
Speaking in Singapore, St. Louis Fed President James Bullard noted the U.S. job market is relatively tight and could put upward pressure on inflation, according to a Reuters report.
--Victor Reklaitis in London contributed to this report.
By Anora Mahmudova and Wallace Witkowski, MarketWatch