Stocks edged lower Thursday, with the major indexes hovering slightly below all-time highs as a parade of strong earnings results helped buoy equity prices earlier this week.
The Dow dipped by more than 80 points, or about 0.2%. The 30-stock index had set a fresh record intraday high during the regular trading day on Wednesday, marking its first all-time high since mid-August. The S&P 500 also logged a sixth straight day of gains in its longest winning streak since the start of July.
Bitcoin prices (BTC-USD) held near its all-time high of over $66,000 reached earlier on Wednesday.
Estimates-topping earnings results from companies from Verizon (VZ) to Anthem (ANTM) and Abbott Laboratories (ABT) extended a streak of strong quarterly reports kicked off by the big banks last week. Tesla (TSLA) shares dipped in early trading after the electric-vehicle maker posted profits that exceeded estimates but revenues that fell short.
With stocks trading near record levels, these kinds of earnings beats will need to be maintained in order to fuel further appreciation, some strategists said.
“Both the fiscal stimulus and monetary stimulus has been driving markets really since the ricochet off the bottom of COVID,” Michael Vogelzang, chief investment officer for Captrust, told Yahoo Finance Live on Wednesday. “What we’re looking at now is, the easy work is done. The Fed is beginning to taper shortly, we expect. We don’t expect interest rates to rise much from here. But what it means is that the market is reasonably valued. It’s not cheap by anyone’s estimation. And in order to progress here … we’re going to have to see stronger earnings growth, and continued strong earnings growth.”
“We’ve seen the peak cycle acceleration,” he added. “Now it’s the hard work – can we continue to create profit growth in our various companies? Can the market and the economies around the globe work through some of the logistical issues?”
So far this earnings season, many goods-producing companies have highlighted concerns over rising input prices and ongoing supply chain disruptions. Tesla noted in its earnings release that “a variety of challenges, including semiconductor shortages, congestion at ports and rolling blackouts, have been impacting our ability to keep factories running at full speed.” And Procter & Gamble (PG) earlier this week estimated it would see over $2 billion in expenses this fiscal year related to rising commodity and freight costs.
However, investors have so far at least momentarily looked through these concerns, and clutched to optimism that these pressures will prove temporary.
“What we have done, in large part, by having massive aggregate demand outpacing aggregate supply is likely not destroyed demand. We likely delayed demand,” Art Hogan, chief market strategist at B Riley-National, told Yahoo Finance Live on Wednesday. “And I think that elongates the economic cycle into ’22.”
“It means we’re going to have above-mean economic growth or GDP growth in ’22, higher than we’re estimating right now, likely, as we start seeing some of that supply response come online,” he added. “I certainly think that when we look at those companies that have to discuss things like margin degradation because of supply chain logistics and not having pricing power, you’re definitely going to have that environment where you have winners and losers.”
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9:32 a.m. ET: Stocks open slightly lower
Here’s where markets were trading just after the opening:
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S&P 500 (^GSPC): -3.92 (-0.09%) to 4,532.27
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Dow (^DJI): -42.63 (-0.12%) to 35,566.71
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Nasdaq (^IXIC): -6.73 (-0.04%) to 15,114.95
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Crude (CL=F): -$0.45 (-0.54%) to $82.97 a barrel
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Gold (GC=F): -$1.90 (-0.11%) to $1,783.00 per ounce
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10-year Treasury (^TNX): +2.1 bps to yield 1.656%
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8:33 a.m. ET: New weekly jobless claims set fresh pandemic-era low, dropping to 290,000
Initial unemployment claims improved to their lowest level since March 2020 last week, as the number of firings and other voluntary separations slowed amid widespread labor shortages.
Weekly unemployment claims totaled 290,000 during the week ended Oct. 16, the Labor Department’s data showed on Thursday. The prior week’s jobless claims were upwardly revised slightly to 296,000 from the 293,000 previously reported.
Continuing jobless claims for the week ended Oct. 9 also came in at their lowest level since March of last year. These unexpectedly broke below 2.5 million for the first time since the start of the pandemic, totaling 2.481 million.
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7:25 a.m. ET Thursday: Stock futures give back some gains after Dow’s record-setting session
Here’s where markets were trading Thursday morning:
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S&P 500 futures (ES=F): -12 points (-0.27%) to 4,516.00
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Dow futures (YM=F): -104 points (-0.29%), to 35,373.00
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Nasdaq futures (NQ=F): -34.25 points (-0.22%) to 15,343.25
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Crude (CL=F): -$0.65 (-0.78%) to $82.77 a barrel
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Gold (GC=F): -$3.40 (-0.19%) to $1,781.50 per ounce
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10-year Treasury (^TNX): +2.6 bps to yield 1.661%
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6:05 p.m. ET Wednesday: Stock futures edge lower
Here’s where markets were trading Wednesday evening:
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S&P 500 futures (ES=F): -2.25 points (-0.05%), to 4,525.75
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Dow futures (YM=F): -30 points (-0.08%), to 35,447.00
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Nasdaq futures (NQ=F): -18 points (-0.12%) to 15,359.5
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter
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