Highlights
Equities pulled back Thursday to end at the day's lows with cautious comments from Federal Reserve officials providing an excuse to trim positions after Wednesday's rally.
The Dow Jones industrial average declined 0.1 percent, the S&P 500 eased 0.2 percent and the Nasdaq was down by 0.3 percent. Bond yields and oil prices rose while the dollar declined.
The Dow industrials moved above 40,000 briefly Thursday morning and the S&P 500 broke above 5,300 for the first time Wednesday but the indexes sold off in the afternoon. A series of Fed speakers warned that they need confirmation that inflation is headed down to 2 percent sustainably before they can consider rate cuts, and they have not seen the evidence yet. Cleveland Fed President Loretta Mester, for example, said she remained more concerned about upside risks, and that the prudent course would be to keep rates where they are, in restrictive territory. E
arlier, bond yields rose after import prices for April came in much higher than expected, an unpleasant surprise for a market focused on inflation. Other indicators, including industrial production, jobless claims, and housing starts, came in on the soft side.
Company earnings news was mixed Thursday. Walmart rallied after posting very strong sales results for the first quarter, which lifted Dollar General and other discount retailers. Cisco topped expectations but ended lower as the market retreated. John Deere sold off on disappointing guidance to weigh on agricultural machinery. Other lagging sectors included pharma, homebuilders, airlines, microchips, entertainment and airlines. Holding up best were travel & tourism, food, chemicals, aerospace & defense and insurance.
The Dow Jones industrial average declined 0.1 percent, the S&P 500 eased 0.2 percent and the Nasdaq was down by 0.3 percent. Bond yields and oil prices rose while the dollar declined.
The Dow industrials moved above 40,000 briefly Thursday morning and the S&P 500 broke above 5,300 for the first time Wednesday but the indexes sold off in the afternoon. A series of Fed speakers warned that they need confirmation that inflation is headed down to 2 percent sustainably before they can consider rate cuts, and they have not seen the evidence yet. Cleveland Fed President Loretta Mester, for example, said she remained more concerned about upside risks, and that the prudent course would be to keep rates where they are, in restrictive territory. E
arlier, bond yields rose after import prices for April came in much higher than expected, an unpleasant surprise for a market focused on inflation. Other indicators, including industrial production, jobless claims, and housing starts, came in on the soft side.
Company earnings news was mixed Thursday. Walmart rallied after posting very strong sales results for the first quarter, which lifted Dollar General and other discount retailers. Cisco topped expectations but ended lower as the market retreated. John Deere sold off on disappointing guidance to weigh on agricultural machinery. Other lagging sectors included pharma, homebuilders, airlines, microchips, entertainment and airlines. Holding up best were travel & tourism, food, chemicals, aerospace & defense and insurance.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
