Stocks dipped at Thursday’s open, swayed by disappointing economic data and a pack of strong, earnings-fueled stock moves.
The Nasdaq fell 0.2%, while the S&P 500 and the Dow Jones industrial average slid 0.4% each.
Earnings news lifted Wal-Mart (WMT), Cisco Systems (CSCO), Salesforce.com (CRM) and Urban Outfitters (URBN) ahead of the open. Advanced Auto Parts (AAP) fell hard after its Q1 report. L Brands (LB), parent of the Victoria’s Secret chain, tumbled 6% after an analyst downgrade.
The stock market today was opening on the fence, with the S&P 500 only narrowly above its Dec. 31 close — and even a mild slip will put it back in negative territory for the year. The Nasdaq is down more than 5% year to date and has pitched camp below its converged 50- and 200-day moving averages. The S&P 500 is struggling to hold its 50-day but remains well above its 200-day line, and the Nasdaq flashed some minor positive signals during Wednesday’s action.
Weekly jobless claims data fell sharply, but not as much as expected. The Labor Department reported claims of 278,000 in the week ended May 14 — down 16,000 claims. Consensus forecasts called for a decrease to 275,000 new claims. The four-week moving average rose to 275,750, a third straight increase.
The Philadelphia Federal Reserve’s Business Outlook Survey for May showed a minus 1.8 reading, essentially unchanged and sticking to negative territory now for eight of the past nine months. Economists’ consensus had projected a rise to 3.
The Conference Board releases its April leading economic indicators numbers at 10 a.m. ET.
Fed Vice Chair Stanley Fischer is scheduled to speak at 9:15 a.m. ET, while William Dudley, president of the New York Federal Reserve Bank, is on deck for a 10:30 a.m. ET speech. Fed comments, including April meeting minutes released Wednesday, have put a June rate hike firmly on the table.
Crude oil pulled back sharply — West Texas Intermediate dropped 2%, leaving it just above $47 a barrel and up a bit more than 2% for the week. Gold also dropped almost 2%, to below $1,255 an ounce. The dollar rose vs. the euro but was down against the yen. The 10-year Treasury yield rose 2 basis points to 1.87%.
Wal-Mart soared nearly 8% out of the open after reporting a strong first-quarter sales and earnings beat. Its shares ended Wednesday down 3% for the week so far, marking a second straight weekly decline that sent the stock below its 200-day moving average in heavy trade, interrupting a six-month advance.
Cisco Systems climbed more than 5% after reporting late Wednesday, with its fiscal Q3 earnings narrowly beating and revenue declining less than consensus expectations. Management lifted its Q4 EPS guidance to just above consensus views. Cisco shares ended Wednesday fighting to hold support at their 200-day moving average, and in a 15-month consolidation.
Advanced Auto Parts/Monro Muffler
Auto parts retail stocks came under sharp pressure after two key earnings reports. Advance Auto dropped 5% after its first-quarter earnings stopped a dime short of projections, and revenue fell 1.9% — worse than the consensus target. Management projected a same-store-sales decline of 3% to 5% for the year, and announced Chief Financial Officer Mike Norona would retire as soon as a replacement is found. The stock had declined for four straight weeks after meeting resistance at its 10-week moving average.
Monro Muffler (MNRO) shed 13% after its fiscal Q4 results backfired, with earnings growth stopping slightly below view, and revenue printing well short of analyst expectations. The company also issued Q1 sales and EPS guidance that trailed the consensus targets.
Overseas markets traded flat to lower. Benchmark indexes across Asia ended Thursday’s session narrowly mixed. Markets in Europe were under some pressure near midday, led by London’s FTSE 100 which traded 1% lower.