U.S. stocks ended lower on Thursday after a choppy session as strong economic data offset disappointing earnings reports from several companies.
The Dow Jones Industrial Average rose 5.85 points, or 0.02 per cent, to 23,930.83, the S&P 500 lost 5.93 points, or 0.22 per cent, to 2,629.74 and the Nasdaq Composite dropped 12.75 points, or 0.18 per cent, to 7,088.15.
A sharp drop after the open had pushed the S&P 500 and the Dow Jones Industrial Average below their 200-day moving averages, a key technical indicator of longer-term momentum, but both indexes pared losses to rise back above those levels.
Shares of insurer American International Group Inc and drug distributor Cardinal Health Inc plunged after the companies reported quarterly results. AIG, down 5.3 per cent, and Cardinal Health, down 21.4 per cent, were among the biggest drags on the S&P 500.
On the other hand, U.S. economic data provided a more upbeat outlook. The number of Americans receiving unemployment aid fell to its lowest since 1973, and the U.S. trade deficit narrowed for the first time in seven months. Factory orders for March also rose.
While it is considered highly unlikely the U.S. delegation in Beijing will strike a breakthrough deal to fundamentally change China’s economic policies, a package of short-term Chinese measures could delay a U.S. decision to impose tariffs on about $50-billion worth of Chinese exports.
“Everything is looking good from an economic perspective,” said Chris Zaccarelli, chief investment officer of Independent Advisor Alliance in Charlotte, North Carolina. “It’s little snippets of negative stories coming out of earnings calls. There’s a yo-yo effect.”
Tesla Inc shares fell 5.6 per cent after Chief Executive Officer Elon Musk cut off analysts asking about the company’s profit potential, despite promises that production of the troubled Model 3 electric car was on track.
Canada’s main stock index finished flat on Thursday as energy shares fell.
The Toronto Stock Exchange’s S&P/TSX Composite Index declined 6.46 points, or 0.04 per cent, to 15,621.47.
The energy group, which was the biggest drag on the TSX, was down 1.5 per cent.
Shares of Canadian Natural Resources Ltd fell 2.2 per cent after Canada’s largest independent petroleum producer reported quarterly results.
Crescent Point Energy Corp. dropped 7.8 per cent after the oil and gas producer reported a first-quarter loss as it sold Canadian crude at a bigger discount.
Seven Generations Energy Ltd. declined 5.4 per cent, while Encana Corp. lost 1.7 per cent.
Elsewhere, Shares of Manulife Financial Corp gained 1.4 per cent after Canada’s largest insurer reported an 18.3-per-cent jump in first-quarter earnings on Wednesday, boosting the heavyweight financial sector.
SNC-Lavalin Group Inc reported a 13-per-cent fall in quarterly profit, hurt by higher costs, sending shares of the construction and engineering firm down 4.2 per cent.
Telecommunications company BCE Inc.’s first-quarter profit narrowly missed analysts’ estimates. Its stock dropped 1.3 per cent.
Norbord Inc. was one the largest decliner on the index, down 6.2 per cent after posting quarterly results.
Oil prices rose on Thursday, boosted by OPEC production cuts and the potential for new U.S. sanctions against Iran, but gains were limited by growing U.S. crude inventories.
Brent crude futures rose 26 cents to settle at $73.62 a barrel, a 0.35-per-cent gain. U.S. West Texas Intermediate (WTI) crude rose 50 cents to settle at $68.43 a barrel, a 0.74 percent increase.
“The price move today is probably based off Iran and the tight oil supply market that we already have,” said Rob Thummel, portfolio manager at energy investment manager Tortoise Capital in Leawood, Kansas. “The margin for error right now is just so low in the oil market that you can’t just take supply off the market.”
Iran’s foreign minister said U.S. demands to change its 2015 nuclear agreement with world powers were unacceptable as a deadline set by President Donald Trump for Europeans to “fix” the deal loomed.
Trump has all but decided to withdraw from the accord by May 12, sources said on Wednesday, though exactly how he will do so remained unclear.
Iran re-emerged as a major oil exporter in January 2016 when international sanctions against Tehran were suspended in return for curbs on Iran’s nuclear program.
Reuters