By Dan Strumpf And Saumya Vaishampayan
U.S. stock prices eased on Thursday, though the Nasdaq Composite
Index resumed its march up toward record territory, as energy
prices fell and investors looked to another muted reading on
inflation.
The Dow Jones Industrial Average fell 31 points, or 0.2%, to
18193, pulling back from Wednesday's record close. The S&P 500
shed six points, or 0.3%, to 2108.
The tech-heavy Nasdaq Composite gained seven points, or 0.2%, to
4974, less than 2% away from its record close of 5048.62,
most-recently reached 15 years ago.
Trading activity was modest, as the fourth-quarter earnings
season drew to a close, and fears over Greece's bailout continued
to recede.
Tom Carter, managing director at JonesTrading, said the absence
of market-moving headlines was prompting some investors to curtail
winning bets. "They look at their portfolio and there are stocks
that have ripped, that have done nicely," he said. That leads them
to think, "I'm going take some money off the table and I'm going to
redeploy it."
A renewed selloff in oil prices dragged energy stocks lower.
Energy companies posted the sharpest losses within the S&P 500,
with energy sector index down 2.1%. "You have energy dragging down
the overall index, " said Brian Fenske, head of sales trading at
ITG. "Early morning felt like there was more risk appetite in the
market." U.S. crude-oil futures prices lost 5.3% to $48.30 a
barrel.
The Nasdaq Composite, meanwhile, was bolstered by a rally in
shares of Apple Inc., which gained 0.4%, rebounding from
Wednesday's 2.6% slide. The index also got a lift from Avago
Technologies Ltd., up 13%, after the semiconductor maker said it
would buy Emulex Corp. for $606 million. Emulex shares jumped
25%.
Despite those moves, major stock benchmarks have moved modestly
in recent weeks, coinciding with a drawdown in trading volumes and
market volatility. The CBOE Volatility Index, or VIX, hovered
around its lowest level since early December, recently edging up to
13.98.
"Once you come off that cycle of big macro headlines, you sit
around and wait for what's next," said Larry Weiss, head of trading
at Instinet. Stocks "are kind of range bound," he said.
Easy monetary policy has helped stocks rally since the financial
crisis, as low interest rates make returns on stocks appear more
attractive than those on competing assets. While the Federal
Reserve ended its bond-buying program last year and is looking to
an eventual increase in rates, many investors say aggressive
stimulus efforts from other major central banks should help keep
global rates low.
"Markets, especially on the equity side, have become dependent
on central- bank stimulus," said Chris Gaffney, senior market
strategist at EverBank Wealth Management. "Keeping interest rates
low and putting additional liquidity in the market certainly
creates an environment that's very good for corporations," he said,
which leads to better earnings and stock-market gains.
European stocks and bonds closed higher as the European Central
Bank prepares to launch its bond-buying program. The bank will buy
EUR60 billion (around $68 billion) of bonds each month until
September 2016 under the program that starts next month. Germany's
DAX rose 1% to a record close, while and France's CAC 40 added 0.6%
and finished at its highest since June 2008.
In economic news, the consumer-price index fell 0.7% in January
from December, the Labor Department said Thursday. Prices slipped
0.1% from a year earlier, marking the first year-over-year decline
since October 2009. Economists surveyed by The Wall Street Journal
expected a 0.6% decline in January from December.
In other markets, gold futures prices rose 0.9% to $1211.80 an
ounce. Treasury prices fell, lifting the 10-year yield to 1.998%
from 1.968% on Wednesday.
Morgan Stanley agreed to pay $2.6 billion to settle U.S. claims
linked to the sale of mortgage bonds. Its shares fell 0.9%.
Bank of America Corp. agreed to pay a group lenders to the
failed Fontainebleau Las Vegas $300 million to settle allegations
it improperly advanced funds to the casino project as its finances
deteriorated. Its shares fell 2.7%.
Salesforce.com Inc. posted a 26% jump in quarterly revenue from
a year ago, driven in part by international sales. Deferred
revenue, a closely watched metric for the company, rose 32% in its
fiscal fourth quarter. The company's shares advanced 11%.
Write to Dan Strumpf at daniel.strumpf@wsj.com and Saumya
Vaishampayan at saumya.vaishampayan@wsj.com
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