Early morning gains quickly evaporated on Thursday as a selloff in health care overshadowed the Federal Reserve's decision a day earlier to raise interest rates.
The S&P 500 was down 0.23%, the Dow Jones Industrial Average slid 0.19%, and the Nasdaq fell 0.08%.
Biogen (BIIB) was downgraded from overweight to equal weight, Morgan Stanley said. Analysts said they see limited upside for the stock in the near term and that the change was not a "downside" but a "timing" call.
Stocks neared records set at the beginning of the month on Wednesday after a rate hike from the Fed reaffirmed the central bank's faith in the strength of the U.S. economy. The Fed decided to raise the federal funds rate by 25 basis points to 0.75% to 1% following its March meeting, the third increase since 2008. The Fed forecast two more rate hikes in 2017, in-line with its previous forecasts and as markets anticipated.
Markets "had expected [a rate hike] and they had been very clear in telegraphing that to the Fed as well," Bodhi Ganguli, lead economist at Dun & Bradstreet, said in a phone call. "There was relief that we're on this path to normalization... It basically signals confidence in the U.S. economy, both from the Fed and the markets. If the markets didn't believe it, they wouldn't have reacted positively."
Crude oil prices gave back gains to fall into the red on Thursday. Crude rallied a day earlier after a weekly reading on domestic stockpiles showed a surprise decrease. Prices had been under pressure after the Organization of Petroleum Exporting Countries raised its forecasts for non-member output this year and the International Energy Agency said global oil supplies increased last month.
West Texas Intermediate crude was down 0.4% to $48.67 a barrel on Thursday.
Jobless claims in the U.S. remained at multi-year lows over the past week. The number of new claims for unemployment benefits decreased by 2,000 to 241,000 in the past week. The less-volatile, four-week claims average rose by 750 to 237,250.
The U.S. housing market remained robust in February as high demand and constrained inventory pushed housing starts higher. Starts increased 3% in February to an annual rate of 1.29 million. Starts for single-family housing rose to its best level since October 2007. Permits fell 6.2% to a rate of 1.21 million.
Business conditions in the Philadelphia region deteriorated slightly in March, according to the latest Philly Fed Index. The business outlook declined to 32.8 in March from 43.3 in February. Analysts expected a sharper drop to a reading of 30. The measure reached its highest level in 33 years in February.
The Bank of England held its key interest rate at 0.25% as expected following its meeting. The central bank also kept its asset purchase program at 435 billion pounds ($533 billion). The BOE said it anticipates inflation in the U.K. to move above its target of 2% over the next few months.
Donald Trump unveiled a $1.15 trillion budget that slashes a dozen departments to finance a significant increase in the military and make a down payment on a U.S.-Mexico border wall. The 'America First' budget includes a $54 billion increase in military spending and proposes massive cuts to the Environmental Protection Agency.
Canada Goose (GOOS) opened for trading on the New York Stock Exchange Thursday morning. The outerwear brand made its market debut at $18 a share.
Williams-Sonoma (WSM) added 3.6% following better-than-expected profit in its fourth quarter. Adjusted earnings of $1.55 a share came in 4 cents above estimates. CEO Laura Alber said the holiday shopping season had been one of the retailer's "best." Its board also approved a 5% increase in its dividend to 39 cents a share.
Oracle (ORCL) moved higher by 8% after exceeding quarterly estimates on its bottom line and raising its dividend. Adjusted earnings of 69 cents a share beat consensus by 7 cents, while sales rose 2.1% to $9.2 billion. The tech company increased its dividend to 19 cents a share from 15 cents. The company has made strides in its cloud computing capabilities, particularly after its recent acquisition of cloud software developer NetSuite.
Dollar General (DG) bested profit estimates and reporting a healthy increase in fourth-quarter same-store sales. The retailer earned $1.49 a share over the quarter, up from $1.30 a year ago and 8 cents higher than consensus. Same-store sales increased 1%, five times higher than anticipated. Dollar General also bumped up its dividend by a penny to 26 cents a share. The stock rose 2%.
Guess? (GES) tumbled 12% after issuing a soft outlook. The apparel retailer anticipates a first-quarter loss of 30 cents to 33 cents a share, deeper than an estimates loss of 23 cents. Same-store sales are expected to fall in the mid-to-high teens percentage range. Fourth-quarter earnings also missed estimates.
Starboard Value is reported to have sold its 1% stake in Macy's (M) . Starboard, which pressured Macy's to separate its real estate from its retail business, owned about 3 million Macy's shares worth about $107.8 million at the end of December, Starboard's recent disclosure showed. The department store is in the midst of a transition with CEO Terry Lundgren due to become executive chairman on March 23, replaced by Jeff Gennette, who is expected to execute a turnaround plan at the retailer.
GoPro (GPRO) surged 10% after affirming its first-quarter guidance at the high-end of its previous range of $190 million to $210 million. The action camera maker also announced restructuring efforts that will reduce adjusted operating expenses to below $495 million. GoPro also announced an additional 270 job cuts.
Technology company 3M (MMM) announced Thursday that it will purchase Scott Safety, Johnson Control International's (JCI) safety gear business, for $2 billion. 3M anticipates the deal will add 10 cents a share to adjusted profit in the first 12 months after closing. The deal is expected to be finalized in the second half of this year.
Wall Street Goes to Washington: In the first of a series of conversations with the President's economic advisors, acclaimed author and columnist Michael Wolff will sit down with Anthony Scaramucci, co-founder of private equity firm Skybridge Capital, to discuss the Trump administration, his thoughts on policies and regulations under debate and his outlook for the next four years. Join us for this cocktail party on Monday, March 27 at The Metropolitan Club in New York. The event is free, but seating is limited and reservations are required. For more information or to RSVP, email firstname.lastname@example.org.