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U.S. stocks on Thursday struggled for momentum, but eventually ended slightly higher, with the push enough to send Wall Street’s benchmark S&P 500 (SP500) index above the historic 5,000 points mark. A post-earnings gain in Walt Disney (DIS) was offset by a slide in PayPal (PYPL).
Meanwhile, Treasury yields climbed despite some strong note and bond auctions.
The tech-heavy Nasdaq Composite (COMP.IND) gained 0.24% to close at 15,793.71 points, helped by an extended positive run in chip stocks. The blue-chip Dow (DJI) added 0.13% to settle at 38,726.20 points.
The S&P 500 (SP500) stuck close to the flatline through much of the day, finally concluding 0.06% higher at 4,997.91 points. At its session high, the index scaled an all-time peak of 5,000.40 points, crossing the key level for the first time ever.
Of the 11 S&P sectors, six ended in the green, with Energy leading the gainers. Utilities topped the losers.
Shares of Disney (DIS) jumped more than 11%, with the stock ending among the top percentage gainers on both the S&P 500 (SP500) and the Dow (DJI). The theme park and movie giant delivered a quarterly earnings report that saw the legacy company top expectations driven by cost cuts, and promise further capital returns through a bigger dividend and the restart of stock buybacks.
Conversely, PayPal (PYPL) ended as the top percentage loser on both the S&P (SP500) and the Nasdaq (COMP.IND). The payment technology firm’s quarterly active accounts continued to slip, and its guidance disappointed investors.
There were several other notable earnings-related moves. Ralph Lauren (RL) surged after the apparel designer smashed quarterly comparable sales growth expectations. Luxury fashion firm Tapestry (TPR) also jumped, as a strong revenue growth in its Coach business offset declines in its Kate Spade and Stuart Weitzman brands.
U.S.-listed shares of AstraZeneca (AZN) slid, after the Anglo-Swedish healthcare giant’s reported quarterly profit missed estimates.
Looking beyond earnings, sentiment also took a bit of a hit on Thursday after a fresh reading on the labor market. Before the opening bell, the number of Americans filing for initial jobless claims in the past week declined to 218K, less than the anticipated figure of 222K. The report showed that the labor market continues to remain resilient and added to an overall recent trend of stronger-than-expected data.
Turning to the fixed-income markets, yields were higher on Thursday as traders shed bonds. Strong demand for a record $42B 10-year note auction in the previous session along with a $25B 30-year bond auction today failed to ignite yields.
The longer-end 30-year yield (US30Y) was up 5 basis points to 4.36%, while the 10-year yield (US10Y) was also up 5 basis points to 4.15%. The shorter-end more rate-sensitive 2-year yield (US2Y) was up 4 basis points to 4.46%.
See how Treasury yields have done across the curve at the Seeking Alpha bond page.
“Today was a somewhat muted day – at least when it came to technology stocks. What’s interesting is that value stocks like energy and real estate outperformed the market, as jobless claims came in better than expected,” Leo Nelissen, part of investing group iREIT on Alpha, told Seeking Alpha.
“Furthermore, today’s massive Treasury auction signaled that the market is very cautious ahead of tomorrow’s potential CPI revisions, which could signal that the economy remains too hot for the Fed to cut rates. Generally speaking, this benefits value stocks,” Nelissen said.
“When adding the strong performance of tech stocks in the past few weeks, it is likely that stronger-than-expected economic data could force money into non-tech sectors in the days ahead,” Nelissen added.