The specter of a Trump presidency loomed over Wall Street on Thursday as investors wrestled with the changes and uncertainty the new administration could bring.
The Dow Jones Industrial Average fell for its fifth straight session, further distancing itself from recent records, in the countdown to Friday's inauguration of President-elect Donald Trump. The Dow fell 0.37% and is now more than 250 points away from 20,000, a level it has never reached and one it appeared certain to hit just weeks ago.
The S&P 500 was down 0.36%, and the Nasdaq slipped 0.28%. Stock losses escalated in the final hours of the session.
Stocks have struggled in recent days with the so-called "Trump rally" appearing to have subsided. Wall Street has tried to make sense of the incoming administration's policies, including which will actually come to pass and which were merely campaign bluster. Trump will be inaugurated as the 45th president of the United States on Friday.
"The question surrounding the financial markets will be whether or not most of his campaign rhetoric regarding trade agreements will actually be implemented," Peter Cardillo, chief market economist, wrote in a note. "We suspect in large part it will be watered down. The mere thought of it, however, will raise the possibilities that trade wars will develop, thus bringing the world financial order closer to protectionism than at any time since the early 1930s."
Trump's pick for Treasury Secretary, Steve Mnuchin, veered from the President-elect's views on a strong dollar during his confirmation hearing on Thursday. Mnuchin told the Senate Finance Committee that the long-term strength of the greenback is "important" and that Trump was merely referring to "some negative impacts" of the stronger U.S. dollar over the short term.
In an interview last week with The Wall Street Journal, Trump said the U.S. dollar had become "too strong" and criticized China for what he sees as currency manipulation. Trump noted that U.S. "companies can't compete with [China] now because our currency is too strong and it's killing us."
The U.S. Dollar Index, which measures the strength of the dollar against a basket of six major currencies, rose 0.2% to 101.44 on Thursday.
Promising subscriber growth from Netflix (NFLX) - Get Netflix, Inc. (NFLX) Report boosted shares of the streaming giant. Netflix jumped nearly 4% after rocketing past estimates in its fourth quarter. The streaming service added 7.05 million subscribers in the recent quarter, far better than growth of 3.57 million subscribers in the third quarter. Netflix added 1.93 million new U.S. subscribers during the quarter, easily surpassing Wall Street's expectations for 1.4 million new domestic subscribers. Net income rose to 15 cents a share, up a nickel from the same quarter a year earlier and 2 cents above estimates.
Netflix noted in its letter to shareholders that the over-the-top content market has become increasingly saturated as more companies have entered the space, including Amazon (AMZN) - Get Amazon.com, Inc. Report , which expanded its Prime Video Service in 2016.
Housing starts in December rose at a faster-than-expected pace, climbing to an annual pace of 1.226 million. Economists anticipated an annual pace of 1.188 million. Building permits came in at a pace of 1.225 million, above estimates of 1.2 million.
Initial jobless claims fell in the past week, according to the Labor Department, another sign of a tightening labor market. The number of new claims for unemployment benefits fell by 15,000 to 234,000. Analysts anticipated claims to tick up to 255,000.
The European Central Bank on Thursday opted to leave rates unchanged, as economists had expected. The interest rate on refinancing was left unchanged at 0%, while the deposit facility interest rate held at negative 0.4%. In a press conference, ECB President Mario Draghi noted signs of a "somewhat stronger" global economic recovery.
At its last meeting, the ECB left its bond buying at 80 billion euros a month until March 2017. Bond buying will then drop to 60 billion euros a month in April and will extend until December 2017, though could be pushed out further if needed, the bank said.
Crude oil prices pared gains on Thursday after a weekly reading on domestic inventories showed building supply. U.S. crude oil inventories added 2.3 million barrels in the past week, while gas supplies jumped by 6 million barrels, the Energy Information Administration said Thursday.
West Texas Intermediate crude closed 0.6% higher at $51.37 a barrel on Thursday.
Citigroup (C) - Get Citigroup Inc. Report moved lower by 1.2% after getting hit with a $25 million fine from the U.S. Commodity Futures Trading Commission. The commission had investigated charges of spoofing U.S. Treasury futures markets from mid-2011 to the end of 2012. Five Citigroup traders were found to have made bids with the intent to cancel before they went through.
Kinder Morgan (KMI) - Get Kinder Morgan Inc (KMI) Report was slightly higher after reporting a sharper-than-expected drop in revenue than anticipated. Revenue declined by 6.9% to $3.39 billion, missing estimates by $150 million. The company swung to a profit of $209 million from a loss of $695 million a year earlier.
CSX (CSX) - Get CSX Corporation Report surged more than 17% on news former Canadian Pacific (CP) - Get Canadian Pacific Railway Limited Report CEO Hunter Harrison had partnered with an activist investor to shake up its management. Harrison has teamed up with Paul Hilal, formerly of Bill Ackman's Pershing Square Capital Management.