U.S. stocks opened lower Thursday morning as investors dug through a heavy round of corporate earnings reports and parsed a better-than-expected report on weekly jobless benefit claims.
What are major indexes doing?
-
The Dow Jones Industrial Average
DJIA,
-0.49%
fell 111 points, 0.3%, to 34,026. -
The S&P 500
SPX,
-0.32%
was down 9 points, 0.2%, at 4,165. -
The Nasdaq Composite
COMP,
-0.20%
lost 8 points, or 0.1%, to open near 13,942.
On Wednesday, stocks ended higher after back-to-back declines, with the Dow rising 316.01 points, or 0.9%. The S&P 500 gained 0.9%, while the tech-heavy Nasdaq Composite jumped 1.1%. The small-cap Russell 2000 index
RUT,
-0.16%
jumped 2.4%.
What’s driving the market?
Stocks were lower early Thursday after Wednesday saw a resurgence of the reflation trade — bets that sectors set to benefit from an economic reopening will outperform other assets — with gains for energy, materials and financials leading gains for the S&P 500 while the small-cap Russell 2000 outperformed its blue-chip peers, noted Han Tan, market analyst at FXTM.
“It is only natural to expect markets to take a breather after posting a string of record highs earlier in the month. After all, technical indicators had been highlighting overbought conditions of late,” he said, in a note.
But with the Cboe Volatility Index VIX, a measure of expected volatility for the S&P 500, trading below 20 and near its long-term average and 10-year Treasury yields BX:TMUBMUSD10Y steady after falling back from 14-month highs, the environment remains conducive for further stock market gains, Tan said.
“The rebound in markets yesterday was impressive, although the bounce back was devoid of a major catalyst just like Tuesday’s selloff wasn’t really “caused” by much
other than a market that’s getting complacent and was short-term stretched,” said Tom Essaye, author of “The Sevens Report.”
“But as has been the case with every other dip this year, buyers were there to step back in. The bottom line is this market remains resilient and it’s going to take materially negative news on the timing of the economic recovery or Fed tapering to break this Pavlovian response to buy every dip.”
Read: The ‘greening’ of the S&P 500: 7 charts for Earth Day
As expected, the European Central Bank left policy unchanged following its Governing Council meeting. ECB President Christine Lagarde will hold a news conference at 8:30 a.m.
Investors also got the latest weekly tally on applications for U.S. unemployment benefits at 8:30 a.m. First-time claims fell by 39,000 to 547,000 in the week ended April 17, the lowest since before the pandemic struck. Continuing claims fell 34,000 to 3.67 million as of April 10.
“While surges in COVID variant infections remains a near-term risk, the outlook for US growth has been upgraded sharply. As more Americans get vaccinated and feel comfortable traveling, going to restaurants, sporting events and live entertainment, more and more people will be able to return to the workforce, if they choose to,” said Anu Gaggar, Senior Global Investment Analyst for Commonwealth Financial Network. “Markets are not particularly enamored, however, as much of the good news has already been priced in. “
Data on U.S. March existing home sales is due at 10 a.m., with the seasonally adjusted annual pace expected to slow to 6.11 million from 6.22 million in February. March leading economic indicators are also due at 10 a.m.
Which companies are in focus?
-
AT&T Inc.
T,
+5.26%
shares rose 3.5% in early trade after reporting first-quarter results early Thursday. -
Shares of Chipotle Mexican Grill Inc.
CMG,
-0.12%
were up 1.8% in early action after the fast-casual restaurant chain late Wednesday blew past Wall Street expectations for its first quarter, saying new menu items, continued strength of online orders and a tailwind from stimulus checks pushed its sales more than 20% higher. -
Qualtrics International Inc.
XM,
+16.22%
shares were 17.2% higher after the maker of employee-engagement and survey software reported first-quarter results late Wednesday. -
Shares of Lam Research Corp.
LRCX,
-3.00%,
which makes the instruments that foundries use to fabricate silicon wafers, were up 0.6% after the bell after reporting record quarterly results late Wednesday. -
Whirlpool Corp.
WHR,
-0.45%
shares gained 2.4% after the appliances maker reported first-quarter earnings that were above Wall Street expectations and raised its guidance. -
Sleep Number Corp.
SNBR,
-11.66%
late Wednesday reported first-quarter earnings above Wall Street expectation and raised its guidance, but mentioned a supply snag that hit its sales in the quarter. Shares slid 9.4%.
How are other assets performing?
-
The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
rose about a basis point to 1.572% as the ECB kept policy on hold, keeping U.S. bonds more attractive to foreign buyers. Yields and bond prices move in opposite directions. -
The ICE U.S. Dollar Index
DXY,
+0.09%,
a measure of the currency against a basket of six major rivals, was down 0.2% at 91.01. -
Oil futures
CL.1,
-0.18%
CLM21,
-0.18%
reversed course to trade higher even as COVID-19 cases continued to rise, with the U.S. benchmark up 11 cents or 0.2%, near $61.46 per barrel. -
Gold futures
GC00,
-0.35%
fell $7.70 or 0.4%, to trade at about $1,785.40 an ounce, after touching a 2-month high Wednesday. -
In Europe, the Stoxx 600
SXXP,
+0.38%
was trading 0.4% higher after the ECB statement. London’s FTSE 100
UKX,
+0.22%
rose 0.3%. - In Asia, Hong Kong’s Hang Seng Index HSI closed 0.5% higher, while the Shanghai Composite SHCOMP slipped 0.2% and Japan’s Nikkei 225 NIK jumped 2.5%.
