By Sue Chang and Anora Mahmudova, MarketWatch
American Airlines shares drop after carrier increases wages
The Nasdaq on Thursday traded at record levels during a busy day
for corporate earnings. Weakness in the energy sector--dragged
lower by a sharp slump in crude-oil prices--and a lack of concrete
details in President Donald Trump's tax plan revealed on Wednesday,
however, capped the broader market's gains.
The Nasdaq Composite Index climbed 22 points, or 0.4%, to 6,047
after rising to an intraday high of 6,050.46 earlier. The
technology-heavy index has outperformed the other benchmarks this
year, rallying 12.3% versus the S&P 500's 6.8%.
The S&P 500 index was up 2 points, or 0.1%, to 2,390. The
energy sector was down 1.5%, representing the worst performer among
the S&P 500's 11 sectors.
Meanwhile, the Dow Jones Industrial Average rose 18 points to
20,993.
Recent outperformance in the tech sector has prompted some to
question whether the Nasdaq is on the verge of a correction,
defined as a decline of at least 10% from a recent peak,
particularly given that much of its gains have been fueled by the
four heaviest-weighted stocks
(http://ritholtz.com/2017/04/is-the-nasdaq-topping-out/?link=mktw)--Apple
Inc. (AAPL), Facebook Inc. (FB), Amazon.com Inc. (AMZN), and
Microsoft Corp. (MSFT)--as the following chart from Barry Ritholtz,
chief investment officer at Ritholtz Wealth Management, shows.
However, the Nasdaq's fresh all-time highs suggests that it
isn't set to slump just yet, even as concerns mount.
Tentative trading action comes after a choppy session on
Wednesday, when markets closed marginally lower as traders weighed
the tax proposal
(http://www.marketwatch.com/story/us-stock-rally-poised-to-stall-as-investors-wait-for-trumps-big-tax-plan-2017-04-26)
from Trump's administration.
Still, the major U.S. equity benchmarks are trading near
records, even if the moves have been in fits and starts.
Read:Morgan Stanley upgrades U.S. stocks but frets over
complacency
(http://www.marketwatch.com/story/morgan-stanley-upgrades-us-stocks-but-frets-over-complacency-2017-04-26)
Analysts said the Trump's tax proposal was light on specifics
and failed to address the question of how its tax cuts would be
funded. One key proposal is to lower the corporate tax rate to 15%
from 35%, with the aim of making U.S. companies more competitive
internationally.
"Investors are anxious for details of the tax plan. They are
also concerned about the shift from monetary to fiscal
accommodation," said Eric Wiegand, senior portfolio manager at the
Private Client Reserve, U.S. Bank.
John Higgins, chief markets economist at Capital Economics, said
there was nothing in Trump's proposals to support stocks and
predicted that the final version will be even more "watered down"
than from the announcement.
"Overall, there is not much difference between his old draft and
his new one, which is even shorter on detail. It is therefore not
surprising that there has been little reaction in the stock
market," he said in a note.
Read:Markets got what was broadly expected from tax plan: a
starting point
(http://www.marketwatch.com/story/markets-got-what-was-broadly-expected-from-tax-plan-a-starting-point-2017-04-26)
Opinion:Trump's tax plan sets the stage for Dow 30,000
(http://www.marketwatch.com/story/trumps-tax-plan-sets-the-stage-for-dow-30000-2017-04-26)
Earnings deluge: In Thursday's trade, investors were back to
focusing on corporate earnings with a long list of companies
reporting.
Shares of Southwest Airlines Co.(LUV) slid 1.3% after the
carrier reported earnings below expectations
(http://www.marketwatch.com/story/southwest-airlines-stock-falls-after-earnings-miss-expectations-2017-04-27).
Ford Motor Co.(F) fell 1.6% even after the car giant's earnings
and revenue topped Wall Street forecasts.
Bristol-Myers Squibb Co.(BMY) also beat forecasts, sending the
shares 3.8% higher
(http://www.marketwatch.com/story/bristol-myers-squibb-stock-surges-3-after-first-quarter-profit-revenue-beats-2017-04-27).
Dow Chemical Co.(DOW) shares shed 1.3% even after earnings came
in ahead of expectations
(http://www.marketwatch.com/story/dow-chemical-shares-rise-14-premarket-as-company-beats-profit-and-revenue-estimates-2017-04-27).
Shares of Under Armour Inc.(UAA) soared 9.1% after the athletic
apparel reported a loss for the first quarter, but it was smaller
than expected
(http://www.marketwatch.com/story/under-armour-shares-soar-after-earnings-beat-2017-04-27).
American Airlines Group Inc.(AAL) shares slumped 5% after the
air carrier reported first-quarter results, and announced a pay
increase for crew members.
Domino's Pizza Inc.(DPZ) shares rose 3.3% after the pizza maker
beat estimates.
Read:The $2 trillion earnings day: Google, Amazon and Microsoft
top frenzy of reports
(http://www.marketwatch.com/story/the-2-trillion-earnings-day-google-amazon-and-microsoft-top-frenzy-of-reports-2017-04-26)
Shares of PayPal Holdings Inc.(PYPL) rallied 6.9% after the
online-payments company late Wednesday beat earnings expectations
(http://www.marketwatch.com/story/paypal-earnings-beat-stock-buyback-send-stock-to-record-levels-2017-04-26)
and announced a $5 billion stock-repurchase plan.
H&R Block Inc.(HRB) and Intuit Inc.(INTU) extended gains,
after rallying in the extended session Wednesday after earnings
reports.
Read:H&R Block, Intuit reassure investors after Trump's tax
announcement
(http://www.marketwatch.com/story/hr-block-intuit-reassure-investors-after-trumps-tax-announcement-2017-04-26)
(http://www.marketwatch.com/story/hr-block-intuit-reassure-investors-after-trumps-tax-announcement-2017-04-26)After
the market closes, earnings from Google parent Alphabet Inc.(GOOGL)
(GOOGL), Microsoft Corp., Amazon.com Inc. and Starbucks Corp.(SBUX)
are on tap.
Economic docket:Initial jobless claims
(http://www.marketwatch.com/story/jobless-claims-jump-to-one-month-high-of-257000-2017-04-27)
jumped by 14,000 to 257,000, a one-month high, though the increase
appeared largely concentrated in New York state.
The trade gap in goods--services are excluded
(http://www.marketwatch.com/story/us-trade-deficit-widens-in-march-2017-04-27)--widened
to $64.8 billion in March from $63.9 billion in February.
New orders for U.S. durable goods
(http://www.marketwatch.com/story/durable-goods-orders-rise-07-in-march-to-mark-third-gain-in-a-row-2017-04-27)
rose 0.7% in March to mark the third straight gain, though demand
was inflated by new bookings for fighter planes and passenger
aircraft.
Central banks in focus: Earlier Thursday, the Bank of Japan as
expected left its ultra-accommodative monetary policy unchanged
(http://www.marketwatch.com/story/bank-of-japan-leaves-rates-unchanged-says-inflation-is-lagging-2017-04-26)
and offered a more upbeat tone on the country's economy.
Meanwhile, the European Central Bank kept its monetary policy
unchanged
(http://www.marketwatch.com/story/ecb-leaves-rates-unchanged-reiterates-asset-purchase-plans-2017-04-27)
and re-emphasized that it could increase the size or lengthen the
duration of its EUR60 billion-euros-a-month asset-purchase program
if inflation looks set to fall back below its target of near but
just below 2%.
Check out:ECB live blog: Mario Draghi sees diminished downside
risks
(http://blogs.marketwatch.com/thetell/2017/04/27/ecb-live-blog-mario-draghi-expected-to-avoid-taper-talk/)
Other markets: The Mexican peso and Canadian dollar advanced
against the U.S. dollar on Thursday, after the Trump administration
backed away from threats to abandon the North American Free Trade
Agreement
(http://www.marketwatch.com/story/trump-backs-off-threats-promises-us-will-stay-in-nafta-2017-04-26).
Stocks in Asia ended mixed
(http://www.marketwatch.com/story/asian-markets-pull-back-ahead-of-boj-rate-announcement-2017-04-26)
as investors digested Trump's tax plan. European stocks were lower
(http://www.marketwatch.com/story/european-stocks-snap-winning-streak-with-ebc-on-deck-2017-04-27)
after the ECB announcement. Oil prices dropped more than 2%, with
crude oil moving further below the $50 mark.
Gold was flat, while the ICE Dollar Index was little
changed.
--Sara Sjolin contributed to this article.
(END) Dow Jones Newswires
April 27, 2017 13:43 ET (17:43 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.