BYND Beyond Meat Inc

By Joe Wallace 

U.S. stocks bounced around the flatline Thursday as investors sold shares of healthcare and energy companies.

The S&P 500 fell 0.1% shortly after the opening bell, while the Nasdaq Composite slid 0.4%, putting the tech-heavy benchmark on pace for a fifth straight daily decline. The Dow Jones Industrial Average added around 73 points.

Many healthcare stocks in the S&P 500 traded in the red after the U.S. said a day earlier it would support the temporary waiver of intellectual property provisions that would allow developing countries to produce Covid-19 vaccines created by pharmaceutical companies. Vaccine makers including Pfizer and Johnson & Johnson were among the market's losers on Thursday.

Energy stocks also struggled, while tech and material stocks notched minor losses.

Still, major U.S. indexes stand at or close to all-time highs, bolstered by a surge of economic growth and corporate earnings as restrictions on some activities are relaxed. Some investors say the speed of the U.S. recovery, which stands in contrast to some other regions where Covid-19 vaccines aren't as widespread, will keep stocks on an upward trajectory.

"We should see cash flows and company cash flows really improve, especially with the reopenings happening," said Mary Nicola, a fund manager at PineBridge Investments. Although valuations are high, stocks remain attractive compared with low-yielding bonds, she added.

The Labor Department said jobless claims dipped below 500,000 last week for the first time during the Covid-19 pandemic as layoffs declined and hiring accelerated. Initial claims for unemployment benefits, a proxy for layoffs, fell to 498,000 from 590,000 a week before.

The upbeat economic news appeared to have little impact on the market though as investors focused on corporate developments.

Shares of vaccine makers led most other healthcare stocks lower. Pfizer shed nearly 3%, while Johnson & Johnson slipped 0.4%. Moderna fell 9.2% and AstraZenecas was recently down 1.3%.

Energy stocks in the S&P 500 slipped 0.8% alongside a mild pullback in oil prices.

Elsewhere, shares of Etsy dropped more than 12% after the online crafts marketplace projected a decline in revenue in the second quarter.

News Corp, The Wall Street Journal's parent company, and Beyond Meat are scheduled to report earnings after markets close.

Companies have blown past forecasts so far this earnings season. Of the 381 companies on the S&P 500 that had reported through Wednesday, 84% had topped analysts' expectations, according to FactSet.

Yet many companies beating forecasts have seen a lackluster response in their share price. Some investors say that is a sign, alongside recent volatility in tech stocks, that the rally that began last March is beginning to flag.

"Although the S&P is just 1% off its high, I think equity markets are beginning to look very fatigued," said Paul O'Connor, head of multiasset investments at Janus Henderson.

Indicators including surveys by the American Association of Individual Investors suggest investors are almost uniformly bullish, a setup that tends to precede a pullback in stocks, according to Mr. O'Connor. "There are such high expectations embedded in markets that we're going to need a steady stream of good news just to maintain the current prices," he said.

In the bond market, the yield on 10-year Treasury notes slipped to 1.583% from 1.584% Wednesday. Yields, which move in the opposite direction to bond prices, have fallen for four consecutive days.

Overseas, the Stoxx Europe 600 slipped 0.3%, weighed down by shares of oil, gas, travel-and-leisure and technology companies. In Asia, Japan's Nikkei 225 rose 1.8% and China's Shanghai Composite slipped 0.2%.

--Michael Wursthorn contributed to this article.

Write to Joe Wallace at Joe.Wallace@wsj.com

(END) Dow Jones Newswires

May 06, 2021 10:19 ET (14:19 GMT)

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