DIS Walt Disney Co

By Ellie Ismailidou and Barbara Kollmeyer, MarketWatch

U.S. jobless claims rise, factory orders tumble

U.S. stocks dipped in and out of negative territory Thursday, struggling to hold on to early gains sparked by a decision by the Bank of England to cut its key interest rate for the first time in seven years and to expand its quantitative-easing program.

The S&P 500 index was down less than a point at 2,163. Support came from a 0.3% gain in tech stocks, followed by a 0.2% rise in consumer staples. Five of the index's 10 sectors were in negative territory, led by a 0.4% drop in financials.

The Dow Jones Industrial Average was down 8 points or less than 0.1%, at 18,346, led by a 0.8% gain in Merck & Co. Inc.(MRK) but weighed by a 0.9% drop in Walt Disney Co.(DIS).

Meanwhile, the Nasdaq Composite Index was up 3 points, or 0.1%, at 5,163.

The Bank of England cut its lending rate by 25 basis points to a record low of 0.25%, which met market expectations. However, the central bank also said it would buy up to GBP10 billion ($13.18 billion) of corporate bonds and expand its quantitative-easing program by GBP60 billion to GBP435 billion.

Check out:Live blog of the Bank of England decision and press conference (http://blogs.marketwatch.com/thetell/2016/08/04/live-blog-bank-of-england-expected-to-cut-interest-rates-on-super-thursday/)

The British pound (http://www.marketwatch.com/story/boj-comments-lift-yen-pound-steady-ahead-of-bank-of-england-meeting-2016-08-04) sank in the wake of the decision, while the FTSE 100 index initially spiked but later erased early gains. The yield on the benchmark 10-year U.K. government bond, or gilt was driven to a record low (http://www.marketwatch.com/story/uk-10-year-gilt-yield-hits-record-low-as-boe-expands-stimulus-2016-08-04).

In the U.S., stock futures initially shot higher. But gains proved short lived, with stocks failing to hold early gains and proceeding to flip between small gains and losses.

The market "responded appropriately" to the bottom-line notion that "a central bank can only do so much," said Diane Jaffee, senior portfolio manager at TCW. The BOE's decision was a step in the right direction but investors are still focusing on the remaining political uncertainty, Jaffee added.

Meanwhile, in the U.S., the number of people who applied for first-time unemployment benefits (http://www.marketwatch.com/story/jobless-claims-rise-3000-to-269000-2016-08-04) rose by 3,000 to 269,000 last week, marking the highest level since the end of June, though claims still point to a healthy labor market. And factory orders fell 1.5% in June (http://www.marketwatch.com/story/factory-orders-fall-sharply-for-second-straight-month-in-june-2016-08-04), the second consecutive sharp decline, the Commerce Department reported Thursday.

The mixed economic data came a day ahead of the July nonfarm-payrolls report, which could be pivotal for the Federal Reserve's future monetary policy.

"Ahead of tomorrow's July payroll report, the pace of firings remains modest," said Peter Boockvar, chief market analyst at The Lindsey Group. However, "a benign pace of firings doesn't contradict a slowing rate of job growth," Boockvar said.

Recent data has made it evident that "there's just not enough juice in the U.S. economy" to warrant a rate hike, said Peter Cardillo, chief market economist at First Standard Financial Company.

More important, the BOE decision will make it harder for the Fed to raise rates, Cardillo said.

Eyes on oil: Investors were closely watching gyrations in oil prices, after a rally in crude futures helped the Dow industrials gain on Wednesday.

"Oil has once again established itself as the central thematic behind the world's financial markets and the fact we saw such a powerful reversal at the trend low, despite U.S. dollar strength, has driven a slight uplift in sentiment," said Chris Weston, chief market strategist at IG, in a note.

On Thursday, crude-oil futures saw choppy trade. Bulls struggled to build on a Wednesday bounce that came after the Energy Information Administration data reported a surprise 3.3 million-barrel fall in gasoline inventories (http://www.marketwatch.com/story/crude-prices-get-a-break-from-the-bears-after-gasoline-stocks-fall-sharply-2016-08-04).

Stocks to watch:Restaurant Brands International(QSR) fell 2% after the company reported profit and revenue that fell short of estimates.

Viacom Inc.(VIA)(VIA) posted better-than-expected earnings and sales, sending shares 0.4% higher. (VIA)SeaWorld Entertainment Inc.(SEAS) plunged 12.6%, after the company met earnings forecasts, but fell short on revenue as it reported attendance down.

Shares of Kellogg Co.(K)gained 2.3%, after the cereals and snacks company matched second-quarter profit expectations (http://www.marketwatch.com/story/kellogg-misses-sales-expectations-but-boosts-profit-outlook-2016-08-04), but provided an upbeat outlook for the year.

Digital-payments company Square Inc.(SQ) shot up 10.8% after raising its revenue guidance for the year.

Read:Square earnings give Jack Dorsey an actual growth story (http://www.marketwatch.com/story/square-earnings-give-jack-dorsey-an-actual-growth-story-2016-08-03)

(http://www.marketwatch.com/story/transocean-results-top-targets-as-profit-drops-2016-08-03)Tesla Motors Inc.(TSLA) shares fell 0.9% after the electric car maker's reported a bigger-than-expected second-quarter loss, and the company promised 50,000 car deliveries in the second half of the year.

Read:Elon Musk: Tesla isn't really a money-losing business (http://www.marketwatch.com/story/elon-musk-tesla-is-not-really-a-money-losing-business-2016-08-03)

(http://www.marketwatch.com/story/elon-musk-tesla-is-not-really-a-money-losing-business-2016-08-03)TripAdvisor Inc (http://www.marketwatch.com/story/tripadvisor-misses-targets-as-hotel-revenue-falls-2016-08-03).(TRIP) missed targets as hotel revenue fell, sending shares down 8.6%.

Transocean Ltd.'s (http://www.marketwatch.com/story/transocean-results-top-targets-as-profit-drops-2016-08-03)(RIG) quarterly profit dropped sharply as revenue was nearly halved, but results beat expectations and shares of the oil driller rose 4.3%. Herbalife Inc (http://www.marketwatch.com/story/herbalife-swings-to-loss-boosts-outlook-2016-08-03).(HLF) swung to a second-quarter loss, but lifted its outlook. Shares were up 0.9%.

GoDaddy Inc (http://www.marketwatch.com/story/godaddy-narrows-losses-as-revenue-surges-2016-08-03).(GDDY) jumped 12.4% after the seller of web addresses posted a narrower quarterly loss on a revenue jump.

Other markets:Asian markets (http://www.marketwatch.com/story/asian-markets-edge-up-but-nikkei-reverses-early-gains-2016-08-03) finished higher, inspired by gains for oil prices. In Europe, the Stoxx Europe 600 index rose 0.4%.

Gold prices reversed early losses to trade up 0.3%.

(END) Dow Jones Newswires

August 04, 2016 11:06 ET (15:06 GMT)

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