Stocks Turn Lower as Crude Gives Back Gains
Stocks turned lower by late morning Thursday after crude oil gave back all of the day's gains.
The S&P 500 was down 0.14%, the Dow Jones Industrial Average fell 0.23%, and the Nasdaq fell 0.03%.
Markets enjoyed a two-day rally over Tuesday and Wednesday, the best in around two months, as investors came to accept the higher likelihood of another rate hike when the Federal Reserve next meets in June.
Crude gave back earlier gains achieved on Thursday as a rally a day earlier faded. Oil boosted stocks on Wednesday on signs cuts in production were reducing overall supply in the U.S. Crude oil closed at its highest settlement since Oct. 9, 2015, on Wednesday after a weekly read on U.S. inventories showed a larger-than-expected decline.
West Texas Intermediate crude oil fell 0.4% to $49.34. Crude had topped the $50-mark for the first time since November earlier in the session.
Pending home sales in the U.S. surged to a 10-year high in April, the latest sign of a robust housing sector. The number of home contract signings rose 5.1% last month to a reading of 116.3, according to the National Association of Realtors, its third straight month of growth.
Orders for long-lasting, or durable, goods in the U.S. rose at a faster-than-expected pace in April as demand for new cars, trucks and commercial jets boosted the metric. Durable goods orders rose 3.4% in April, well above estimates of 0.9% growth. Core durable orders, excluding transportation, rose 0.4%.
The number of new claims for unemployment benefits fell by 10,000 to 268,000 in the previous week, the Labor Department reported on Thursday. The less-volatile, four-week average showed initial jobless claims rise by 2,750 to 278,500.
US Foods (USFD) - Get Report jumped more than 5% in its trading debut, topping its initial public offering price of $23 a share. The food services company sold 44.4 million shares in the second-largest initial public offering of the year.
Costco (COST) - Get Report rose 6% after a mixed third quarter in which a stronger U.S. dollar and lower gas prices ate into the top-line. The second-largest retailer in the U.S. by sales said revenue climbed 2.6% to $26.77 billion, below estimates of $27.07 billion. The bulk retailer said comparable sales rose 3% when excluding currency exchange and fuel prices.
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HP Inc. (HPQ) - Get Report climbed 6% despite missing sales estimates in its second quarter and guiding for third-quarter earnings below consensus. The computer hardware company reported an 11% decline in quarterly revenue to $11.59 billion, short forecasts by $130 million. Third-quarter profit guidance between 37 cents and 40 cents a share missed consensus of 41 cents.
Sears (SHLD) rose 1% after reporting a narrower-than-expected net loss and sales declined at a slower pace than forecast. Comparable-store sales declined 6.1%, dragged on by a 5% drop at Kmart. Overall revenue fell 8.3% to $5.39 billion, though beat expectations by $130 million.
Williams-Sonoma (WSM) - Get Report slid 1% despite topping quarterly estimates on its top- and bottom-lines. The homewares retailer earned 53 cents a share, 3 cents higher than expected, while revenue rose nearly 6% to $1.09 billion.
LionsGate (LGF) reported a 41% decline in net income over its recent quarter as profit was dragged down by box-office bomb Gods of Egypt. The film studio generated net income of $11.4 million for the quarter ended in March, down from $19.5 million in the year-ago quarter. Record TV revenue helped to boost total revenue by 22% to $791.2 million.
Dollar Tree (DLTR) - Get Report climbed 12% as growth in customer transactions boosted first-quarter same-store sales by 2.3%. The discount retailer expects second-quarter same-store sales growth in the low single-digits.
