NEW YORK: Major U.S. stock indexes turned in their largest declines in two weeks Thursday, pulling back after days of edging closer to record highs.
Telecommunications and utilities shares led the broad losses, which pulled the Dow Jones Industrial Average back below 18000 after the index this week closed above the milestone for the first time since July. The two sectors, considered relatively steady and safe, are up the most in the S&P 500 over the past 12 months.
The Dow and the S&P 500 both snapped three-session winning streaks and are 1.8% away from their highs reached in May.
The Dow fell 113.75 points, or 0.6%, to 17982.52. The S&P 500 declined 10.92 points, or 0.5%, to 2091.48 and the Nasdaq Composite Index fell 2.24, or less than 0.1%, to 4945.89.
Telecommunications stocks in the S&P 500 fell 2.7%. Shares of Verizon Communications dropped $1.72, or 3.3%, to $50.03 after the company reported that quarterly revenue rose less than analysts had anticipated and said earnings could plateau in 2016.
Utilities stocks in the S&P 500 dropped 2.1%. Consolidated Edison lost 2.36, or 3.2%, to 71.10.
If growth is improving and the U.S. isn’t heading for a recession, the premium fetched by stable stocks becomes less valuable, said Peter Stournaras, portfolio manager of the BlackRock Large Cap Series Funds.
Earlier Thursday, Labor Department data showed the number of U.S. workers who applied for unemployment benefits fell to the lowest level in 43 years, a sign of continuing strength in the labor market.
U.S. crude-oil prices fell 2.3% to $43.18 a barrel. Stabilizing oil prices have helped boost stocks during their two-month rebound.
“It’s been an incredible rally,” said Joe Tanious, strategist at Bessemer Trust. But with relatively full valuations in the U.S. and lackluster corporate earnings, “it’s very difficult to identify drivers that can move the market a heck of a lot higher from here,” he said.
Travelers Cos. fell the most among the Dow industrials’ components, notching its biggest one-day percentage decline since August 2011 and shaving 48 points off the index. Its shares fell 7.01, or 6.1%, to 108.79 after the insurer reported a first-quarter profit drop of 17%, citing losses from wind and hail storms in Texas.
United Continental sank 5.84, or 10%, to 52.76 after the carrier reported late Wednesday that first-quarter profit slid 38% from a year earlier.
Shares of Verizon Communications dropped after the company reported that revenue rose less than analysts had anticipated.
The yield on the benchmark 10-year Treasury note rose to 1.870%, from 1.852% on Wednesday. Yields rise as prices fall.
The Stoxx Europe 600 fell 0.3% after the European Central Bank kept interest rates on hold, as expected. The euro dropped 0.1% against the dollar to $1.1289.
Investors had expected a quiet meeting after the ECB in March unveiled a wide-ranging package of stimulus measures.
In a news conference Thursday, ECB President Mario Draghi kept the possibility of further interest-rate cuts on the table. He also noted that inflation could turn negative in coming months before picking up later this year.
Mr. Draghi offered little new information to investors, said Philippe Gijsels, chief strategist at BNP Paribas Fortis. “He was trying to convince the market he’ll do whatever it takes and recent measures are working…but the market reaction is not extremely positive,” Mr. Gijsels said.
The Bank of Japan also meets next week, and many investors expect the bank to signal future interest-rate cuts.
Japan’s Nikkei Stock Average rose 2.7%, hitting a more than two-month high. Hong Kong and Australia also gained, though the Shanghai Composite Index ended lower.
