By Dan Strumpf And Saumya Vaishampayan
U.S. stocks slipped Thursday, pausing after two sessions of
gains, amid declines in European markets.
The Dow Jones Industrial Average fell 28 points, or 0.2%, to
18085, while the S&P 500 eased four points, or 0.2%, to 2103.
The Nasdaq Composite Index fell six points, or 0.1%, to 5005.
Traders said a selloff in European shares and a turn lower in
oil prices kept U.S. stocks under pressure, despite several
positive earnings reports, particularly from the financial
sector.
"There's still nervousness about Europe for sure," said Steve
Bombardiere, trader at Conifer Securities. "We have these days
where it just overtakes whatever the earnings news is."
Germany's DAX fell 1.9% and France's CAC 40 lost 0.6%, as German
government bonds hit record highs.
In earnings news, shares of Citigroup Inc. rose 1.6% after
reporting its first-quarter profit jumped a bigger-than-expected
21%.
Goldman Sachs GroupInc. said its first-quarter profit and
revenue rose, with results beating analysts' expectations. Still,
shares fell 0.7%.
Stocks have advanced this month, advancing back toward all-time
highs. The Dow and S&P have both gained 1.7% so far in April
and are approaching records last seen in early March. The Dow is
now 1% away from its record of 18288.63, while the S&P is 0.5%
below its record of 2117.39.
Stocks rose Wednesday, pushing the Nasdaq Composite closer to
its all-time high. The Russell 2000 index of small-capitalization
stocks hit a new all-time high Wednesday. The index pulled back
0.1% on Thursday.
Crude-oil futures fell 1.8% to $55.39 a barrel Thursday,
snapping five straight sessions of gains. The declines weighed on
the energy sector, with energy stocks in the S&P 500 shedding
0.8%.
Much of investors' attention, however, remained on the steady
stream of earnings reports. Money managers are bracing for a
pullback in quarterly earnings in the first quarter, as the slump
in oil prices and the strong dollar tripped up many companies.
Analysts expect S&P 500 companies to report a 4.5% fall in
first-quarter earnings, according to FactSet.
"It's a market that is no longer cheap," said Stephen Freedman,
head of cross-asset strategy at UBS Wealth Management Americas.
"You need to have earnings growing at a reasonable pace for the
market to progress."
Mr. Freedman says he expects earnings to grow between 8% and 10%
for the full year, excluding energy companies. Against that
backdrop, he says broad market benchmarks can see high single-digit
returns this year.
"It's an earnings-driven market," he said.
In other earnings news, UnitedHealth Group Inc. lifted its
full-year guidance due to a stronger-than-expected 13% increase in
first-quarter revenue. Shares jumped 3.6%.
Netflix Inc. said Wednesday it added 4.88 million subscribers in
the March quarter, which topped Netflix's own forecast for 4.05
million additions. Shares soared 14%.
SanDisk Corp. shares sank 5.5% after the chip maker said its
first-quarter profit plunged 86%, as revenue fell and the company
booked acquisition and restructuring-related charges.
In economic news, jobless claims rose 12,000 to 294,000 in the
week ended April 11, the Labor Department said. Economists had
expected 280,000 claims.
U.S. housing starts rose 2% in March from a month earlier to an
annual rate of 926,000, the Commerce Department said. Economists
surveyed by The Wall Street Journal had expected an annual rate of
1.04 million.
In other markets, the yield on the 10-year Treasury note fell to
1.909 % from 1.900% on Wednesday. Yields fall as prices rise.
Gold futures added 0.4% to $1205.60 an ounce.
Write to Dan Strumpf at daniel.strumpf@wsj.com and Saumya
Vaishampayan at saumya.vaishampayan@wsj.com
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