U.S. Stocks wrestle with Mixed Economic Data

U.S. stocks were under pressure Thursday, struggling to trade higher as investors shake off a stream of better-than-expected earnings, amid a mixed batch of economic reports and a retreat in crude-oil prices.

“Oil prices are down just a little bit down and we’ve had a mixed bag of earnings,” noted Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research.

The Dow Jones Industrial Average DJIA, -0.07% briefly turned positive had been switching between losses and gains until pushing down about 15 points, 0.1%, at 18,097. About two-thirds of the blue-chip indexes’s 30 components were trading in the red, led by Exxon Mobil Corp. XOM, -0.52%

The S&P 500 index SPX, -0.08% was basically flat at 2,104, with six out of the indexes 10 major sectors showing losses, led by energy and utilities. Consumer staples and health care proved bright spots.

Meanwhile, the tech-heavy Nasdaq Composite COMP, -0.10% was down about 5 points, or 0.1%, at 5,005. A soaring Netflix, which was up nearly 15%, helped boost the index.

Choppy trading in stocks on Thursday came after a pullback from Wednesday’s advances, when better-than-expected earnings and a jump in oil prices sent the benchmarks close to record closing levels. The S&P 500 ended just 0.5% shy of its all-time close of 2117.39 hit Monday, March 2, while the Dow average missed its record by 1%.

Part of the drag on stocks Thursday was due to a mixed bag of economic indicators. That included construction on new homes, which were weaker than expected, and a manufacturing report that was better than expected.

Construction starts rose to annual rate of 926,000 in March, but analysts polled by MarketWatch had expected a 1.04 million, while a report of people seeking new U.S. unemployment benefits in the second week of April. Initial jobless claims rose to 294,000 in the week ended April 11, from a revised 282,000 from the week prior.

A rearing of manufacturing also looked strong, with the Philadelphia Fed’s manufacturing index rising to a reading of 7.5 in April, better than MarketWatch estimates of 6. Any reading above zero signals improving conditions for manufacturing.

Corporate results on Thursday, however, have largely been upbeat. Goldman Sachs Group Inc. GS, -0.35% reported profit and revenue ahead of forecasts.

Citigroup Inc. C, +1.53% posted first-quarter results that beat analysts expectations for profits but missed on revenues.

Also Reporting ahead of the bell, UnitedHealth Group Inc. UNH, +3.54% raised its outlook for 2015 earnings to $6.15 to $6.30 per share. Its prior outlook was for $6.00 to $6.25 per share. The heath-care company’s shares rose 2.8% premarket after it released first-quarter results.

Shares of Philip Morris International Inc. PM, +7.93% picked up 4.6% ahead of the market open after the cigarette maker reported a dip in first-quarter profit, but raised its earnings guidance for the full year.

Netflix Inc. NFLX, +15.57% was trading at a record high of $541.43 after the video-streaming and DVD-rental company, after the close of trading on Wednesday, said that added 4.88 million subscribers in the first quarter.

Fed speakers: Investors will be looking ahead to a healthy lineup of Federal Reserve speakers within a two-hour time frame on Thursday.

  • Atlanta Fed President Dennis Lockhart, scheduled to speak to business leaders in Palm Beach, Florida, at 1 p.m. Eastern Time. Lockhart is a voting member of the policy-setting Federal Open Market Committee this year.
  • Cleveland Fed President Loretta Mester, who isn’t a voter, gives a speech on the economic outlook in New York at 1:10 p.m. Eastern.
  • At 1:30 p.m. Eastern, Boston Fed President Eric Rosengren, also a non-voter, will speak in London.
  • And finally, Stanley Fischer, the Fed’s Vice Chairman, is slated to talk about inflation at the International Monetary Fund at 3 p.m. Eastern.

The hefty Fed lineup comes after comments on Wednesday from St. Louis Fed President James Bullard and Richmond Fed President Jeffrey Lacker, when each made a case for raising interest rates soon.

Other markets: Asian bourses closed mostly higher, while the major European indexes were mired in the red.

Crude oil CLK5, -0.69% pulled back after Wednesday’s 6% rally. Metals rose, and the dollar moved lower.

Source: MarketWatch