Stocks finished mostly lower Thursday, giving up early gains despite solid quarterly earnings. Reports on durable goods orders, jobless claims, and the housing market sent mixed signals about the economy ahead of Friday's data on second-quarter gross domestic product.
The Dow Jones industrial average edged down 2.08 points, or 0.02%, to 11,100.43. The broader Standard & Poor's 500 slipped 5.21 points, or 0.41%, to 1,263.19. The tech-heavy Nasdaq composite fell 15.99 points, or 0.77%, to 2,054.47.
Traders were likely being cautious before Friday's economic numbers, some analysts say. "It seems like people are waiting a little bit until they get tomorrow morning's data before they're willing to commit more capital," says Jeff Kleintop, chief investment strategist at PNC Wealth Management.
The GDP report is projected to show strong quarterly growth of roughly 3% or more, according to analysts. "It's a past piece of data, and let's face it, things looked pretty darn good through most of the second quarter," says Joe Balestrino, fixed income market strategist at Federated Investors. He expects the data to be bearish for bonds but bullish for stocks and the dollar, though a particularly robust growth reading could fan interest-rate fears in the stock market.
Investors will also be monitoring data on personal consumption expenditures, or PCE. "The Fed over the years has given more and more credit to PCE," says Dan Genter, President and CEO of Los Angeles-based investment firm RNC Genter. "If that number comes out to be a very robust number, it's likely to cause a down day. If that number is weak, then that's going to continue to be a positive trend for a market that's just looking for a breather."
Software giant Microsoft's (MSFT
) analyst conference sparked some investor jitters Thursday. Shares fell on reports traders were hoping for a clearer timeline on the launch of the new Vista operating system, even as the company said there was no reason to expect delays.
In earnings news, Exxon Mobil (XOM
) was modestly lower after rising in early trading as the oil heavyweight reported a 36% jump in second-quarter profit.
Shares of DaimlerChrysler (DCX
) rose after the automaker said its second-quarter profit more than doubled.
Security software maker Symantec (SYMC
) was up sharply after the company posted 52% lower quarterly earnings, topping analyst estimates.
In pharmaceuticals, Bristol-Myers Squibb (BMY
) was lower after reporting a decline in second-quarter profit amid competition from generic drugs.
Satellite radio outfit XM Satellite Radio (XMSR
) was higher after initially dipping to a 52-week low on a wider second-quarter loss and reduced full-year subscriber forecasts. Shares of rival Sirius (SIRI
Defense contractors Northrop Grumman (NOC
) and Raytheon (RTN
) were lower after both companies turned in higher quarterly earnings.
Friday's session is set to be a quieter one for earnings. Results are due from Office Depot ODP, Coventry Health Care CHC and Waste Management WMI
Outside of earnings Thursday, Intel (INTC
) was modestly lower after the chipmaker announced plans to start shipping its new Core 2 Duo processor series in August.
In analyst calls, Disney (DIS
) was lower despite an upgrade. J.P. Morgan raised its rating on the company from neutral to overweight.
Economic reports on big-ticket orders and weekly jobless claims came in slightly stronger than expected. Durable goods orders jumped 3.1% in June, from an upwardly revised 0.3% gain in May. Jobless claims fell 7,000 to 298,000 in the week ended July 22. New home sales fell 3% to 1.13 million units in June, weaker than forecast.
Second-quarter GDP is be the main data release on Friday's calendar. Investors will also be digesting the second-quarter employment cost index and the final July reading of University of Michigan's consumer sentiment index.
In the energy markets Thursday, September West Texas Intermediate crude oil futures closed up 60 cents at $74.54 a barrel amid escalating conflict between Israel and Hezbollah.
European markets finished higher. In London, the Financial Times-Stock Exchange 100 index gained 53 points, or 0.9%, to 5,930.1. Germany's DAX index climbed 75.97 points, or 1.36%, to 5,659.07. In Paris, the CAC 40 index was up 58.21 points, or 1.18%, to 5,001.21.
Asian markets finished sharply higher. Japan's Nikkei 225 index rallied 295.71 points, or 1.99%, to 15,179.78. In Hong Kong, the Hang Seng index advanced 299.53 points, or 1.8%, to 16,916.77. Korea's Kospi index added 17.19 points, or 1.34%, to 1,296.27.
Treasury yields inched higher ahead of Friday's GDP report. The 10-year note edged down in price to 100-20/32 for a yield of 5.04%, while the 30-year bond slipped to 90-24/32 for a yield of 5.11%.