U.S. stocks eased further from recent record highs on Thursday as investors digested comments from Federal Reserve Chairman Jerome Powell the previous day that dampened some investor hopes of an interest rate cut this year.
A drop in oil prices dragged down energy shares, adding to the bearish tone. Oil prices slid on record U.S. crude production that led to a surge in inventories, and the energy index was 1.1% lower, the most among the major S&P sectors.
On Wednesday, Powell sought to downplay low inflation as transient, forcing traders to lower their bets on a rate cut this year and snapping a rally in the S&P 500 on Wednesday.
Stocks have "done extremely well, and pockets of the market are overdone," said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey. "Usually when the market moves that quickly, a little bit of caution comes in. And you can argue the Fed, based on the press conference comments yesterday, doesn`t seem to be in a rush to cut rates."
The S&P 500 remains up 16.3% for the year to date.
With first-quarter earnings season winding down, investors are looking for fresh catalysts such as U.S.-China trade developments and economic data.
The Dow Jones Industrial Average fell 174.73 points, or 0.66%, to 26,255.41, the S&P 500 lost 11.56 points, or 0.40%, to 2,912.17 and the Nasdaq Composite dropped 30.83 points, or 0.38%, to 8,018.81.
Markets are waiting for a reading of the Labor Department`s non-farm payrolls data on Friday that is expected to show fewer job additions last month compared with March.
More than 350 of the S&P 500 companies have reported so far, and analysts now expect earnings to rise 0.7%, compared with a 2% fall estimated at the beginning of April, according to Refinitiv data.
Among gainers, Qualcomm Inc rose 0.5% after analysts said the chipmaker was well-positioned in the 5G networks space even as it forecast disappointing current-quarter sales.
The Philadelphia Semiconductor index gained 0.8%.
Among decliners, Dow Inc, the commodity chemicals division spun off from DowDuPont Inc, tumbled 6.4% after reporting a 24 percent fall in core earnings.
Kellogg Co dropped about 3.6% after the cereal and snacks maker said it would replace its chief financial officer and reported a 36.5 percent decline in first-quarter earnings.
At the same time, shares of vegan burger maker Beyond Meat Inc were up 173% in their market debut on Thursday.
Declining issues outnumbered advancing ones on the NYSE by a 1.60-to-1 ratio; on Nasdaq, a 1.08-to-1 ratio favored decliners.
The S&P 500 posted 11 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 47 new highs and 59 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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