Stocks falter after 5 days of setting record highs
Stocks faltered Thursday, taking a breather after posting records closes for five straight days.
The Dow posted a new intraday high before turning 25 points lower. The S&P 500 was down by 0.25 percent after setting a new intraday record, with health care leading decliners. The Nasdaq also shed 0.25 percent.
“I think the market has a problem here, and that is complacency,” said Peter Cardillo, chief market economist at First Standard Financial. “Investors are getting ahead of themselves with the prospects of Trump moving forward with tax reform.”
The three major indexes, along with the small-caps Russell 2000, closed at new all-time highs again on Wednesday, as President Donald Trump continued touting his economic agenda consisting of three key themes: deregulation, corporate tax cuts and fiscal stimulus.
On Thursday morning, Trump tweeted about the stock market’s recent run.
Economic data continued to come in strong Thursday, with weekly jobless claims holding around their lowest levels in more than 40 years, while the Philadelphia Federal Reserve manufacturing index hit its highest level since January 1984.
“The ebullience speaks for itself as manufacturers will be a main beneficiary of any corporate tax changes. This joins a slew of euphoric sentiment indicators that we’ve seen for months but the actual rate of economic growth right now for Q1 is still estimated to be around the same 2% we’ve been stuck in,” said Peter Boockvar, chief market analyst at The Lindsey Group, in a note.
Inflation data released earlier this week, along with testimony from Fed Chair Janet Yellen, lifted market expectations for a rate hike in March. According to the CME Group’s FedWatch tool, expectations for a March move were at 22 percent.
In corporate news, investors parsed through quarterly results from CBS, Wendy’s, Alexion Pharmaceuticals and Marriott, among other firms.
U.S. Treasurys rose on Thursday, with the benchmark 10-year yield falling to 2.48 percent and the short-term two-year note yield holding around 1.24 percent.