Nasdaq hits fresh record on tech earnings; energy stocks drag down Dow

Big 5

U.S. stocks traded in a narrow range on Thursday, within striking distance of all-time highs, ahead of major tech companies’ earnings.

The Dow Jones industrial average and the S&P 500 struggled to hold opening gains, while the tech-heavy Nasdaq composite climbed about a third of a percent to a fresh intraday record in early trade.

Comcast, PayPal and Amazon.com were among the greatest contributors to gains in the Nasdaq.

Ahead of the open, NBCUniversal parent Comcast reported better-than-expected quarterly profit of 53 cents per share and revenue also above forecasts. Shares climbed nearly 4 percent, tracking for their best day since Feb. 3, 2016

Information technology was among the top S&P 500 performers in morning trade, while energy was the worst, dropping more than 1 percent as oil prices fell 2 percent on oversupply concerns.

U.S. crude oil futures for June delivery hit their lowest since March 29 and were last trading near $48.46 a barrel.

While the summer driving season has historically helped drive oil prices higher, domestic inventory levels “remain elevated by historical standards,” Lindsey Bell, investment strategist at CFRA, said in a Thursday note to clients.

“We remain hard pressed to get excited for the prospect of higher oil prices in a sub-two percent GDP growth environment as production in the U.S. continues to increase and rig counts rise,” Bell said. “Incremental demand from emerging markets would be necessary to more substantially drive down inventory levels.”

Alphabet, Amazon.com, Intel, Microsoft, and Starbucks are among companies set to report after the closing bell.

“It’s policy grabbing the headlines but the earnings still drive the market and the matter of the fact is, the earnings have been pretty good,” said JJ Kinahan, chief strategist at TD Ameritrade.

Technology, a key part of the so-called growth trade, has led the U.S. market rally so far this year.

The major U.S. stock indexes closed marginally lower Wednesday, holding within 1 percent of their intraday highs, after the announcement of President Donald Trump’s tax plan. Top officials called the proposal the “biggest tax cut” in U.S. history but remained vague on highly anticipated details such as the tax rate on repatriation of overseas profits.

“I just think we’re a little extended after the two-day move [earlier this week],” said Peter Coleman, head trader at Convergex. “Everybody’s anticipating the tax plan. Although they gave some detail it wasn’t very specific.”

Durable goods orders rose a less-than-expected 0.7 percent in March. Weekly jobless claims increased more than expected to 257,000. Pending home sales fell 0.8 percent in March.

Treasury yields traded mostly lower. The euro held below $1.090.

The European Central Bank kept its benchmark interest rate at zero percent and monetary policy unchanged. ECB President Mario Draghi said in an opening statement that net asset purchases at a new monthly pace of 60 billion euros (nearly $65.6 billion) would “run until the end of December 2017, or beyond, if necessary.”

In morning trade, the Dow Jones industrial average fell 24 points, or 0.12 percent to 20,951. Boeing and UnitedHealth had the greatest positive impact, while Goldman Sachs and Caterpillar contributed the most to losses.

The S&P 500 fell 3 points, or 0.12 percent, to 2,384, with consumer discretionary and utilities leading five sectors higher and energy the greatest laggard.

The Nasdaq composite rose 12 points, or 0.21 percent, to 6,038.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded lower near 10.77.

About four stocks declined for every 3 that advanced on the New York Stock Exchange, with an exchange volume of 351 million and a composite volume of 1.674 million in midday trade.

U.S. crude oil futures for June delivery fell 2.5 percent to $48.35 a barrel on the New York Mercantile Exchange.

Gold futures for June delivery climbed $2.90 to $1,267.10 an ounce.

Source: CNBC

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