U.S. Stocks deflate following Mixed Economic Reports

U.S. stocks were under selling pressure Thursday following a number of economic releases and earnings reports, a day after the Federal Reserve left open the possibility of interest rate hike as early as June.

Thursday’s economic data came in above expectations and pointed to improvement in the labor market and further inflation stabilization – both are key gauges of U.S.economic health that the central bank said it would use to help guide its hand as it aims to start normalizing interest rates.

The S&P 500 SPX, -0.67% fell 15 points, or 0.7%, to 2,092.22 with all 10 main sectors trading lower. Utilities and tech stocks were hit the hardest. The Dow Jones Industrial Average DJIA, -0.60% was off 123 points, or 0.7%, to 17,914.82.

The Nasdaq Composite COMP, -1.12% sank 50 points, or about 1%, to 4,973.75.

Channing Smith, managing director at Capital Advisors, said recent fluctuations in currency and bond markets have created confusion for equity investors.

“Treasury yields have risen over the past week or so and the euro strengthened rapidly, something that is not quite explainable. Those unusual moves spooked investors, by creating uncertainty,” Smith said.

He also pointed to very high valuations despite falling earnings, but said eventually stock prices have to reconcile with the global and domestic economic situation, which is experiencing a slowdown.

Investors were also watching the latest batch of corporate earnings, including first-quarter results from Exxon Mobil Corp. XOM, -0.02% which proved better than expected, albeit significantly lower than its quarterly figures a year ago.

Data: The number of people who applied for U.S. unemployment benefits fell 34,000 to 262,000 in the seven days from April 19 to April 25, the lowest level in 15 years.

The cost of employing the average U.S. worker climbed 0.7% in the first quarter.

Consumer spending rose a seasonally adjusted 0.4% in March. But personal income was flat last month, likely reflecting slower job creation. Inflation, as gauged by the PCE price index, climbed 0.2% in March.

The Chicago PMI jumped in April to a reading of 52.3 from 46.3 in March, to return above the 50-mark signaling expansion. A double-digit gain in the new orders component led to the advance.

Earnings: Reporting ahead of the bell, Exxon MobilCorp. XOM, -0.02% posted better-than-expected profit and sales but the integrated oil giant’s results still show signs of the plunge in oil prices. Shares fell 0.6%.

Another energy company, ConocoPhillips COP, +0.43% reported an adjusted first-quarter loss of 18 cents, slightly bigger than what was forecast. Shares were off slightly.

After the bell, American International Group Inc. AIG, -0.71% LinkedInCorp. LNKD, -1.92% and Visa Inc. V, -1.49% are set to report. Read about what’s expected.

Other markets: Asian stock markets closed mostly lower, while European benchmarks were mixed.

Crude-oil prices CLM5, +0.89% moved slightly higher and most metals declined. The dollar DXY, -0.30% traded mixed against other major currencies.

Source: MarketWatch

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