By Shivani Kumaresan and Shreyashi Sanyal
(Reuters) – The S&P 500 and the Dow edged lower on Thursday as a resurgence of COVID-19 cases globally sapped appetite for stocks, while market participants digested earnings from U.S. airlines and AT&T, along with mixed readings on economic data.
Investor sentiment gradually improved by early afternoon, with seven of the 11 main S&P 500 sectors rising. The S&P 500 healthcare sector hit a fresh record high, while industrials were the biggest gainers.
Supporting the mood was data showing the number of Americans filing new claims for unemployment benefits last week dropped to a fresh one-year low.
The Labor Department report suggested layoffs were subsiding and expectations were rising for another month of blockbuster job growth in April.
Investors are now awaiting quarterly results from technology behemoths next week to provide markets with some direction. Shares of Apple Inc rose 0.3%, helping the tech-heavy Nasdaq remain afloat.
“The most important catalyst is waiting for key FAANG earnings next week, that’s going to tell us the next 50 points on the S&P, either up or down … And in that information vacuum the market really is struggling for direction,” Great Hill Capital Chairman Thomas Hayes said.
American Airlines Group Inc and Southwest Airlines Co reported a smaller-than-expected quarterly loss, signaling a revival in travel demand. The performance of their shares was mixed though, with Southwest rising 1.5% and American Airlines falling 0.7%.
Shares of AT&T Inc jumped 4.3% after the company’s wireless subscriber additions trounced analysts’ estimates.
Separately, data showed U.S. home sales fell to a seven-month low in March, pulled lower by an acute property shortage, which is boosting prices and making owning a house more expensive for some first-time buyers.
Speedy vaccination rollouts in the United States has improved the pace of economic recovery, infused confidence among people and given a solid start to the first-quarter earnings season.
However, a surge in COVID-19 cases in India and elsewhere in Asia has kept investors guarded.
“The market is a little bit concerned the coronavirus cases flaring up in India and in parts of Asia which have not had vaccine rollouts as strongly as we had in the U.S.,” Hayes said.
At 12:05 p.m. ET the Dow Jones Industrial Average was down 64.28 points, or 0.19%, at 34,073.03, the S&P 500 was down 1.51 points, or 0.04%, at 4,171.91 and the Nasdaq Composite was up 29.57 points, or 0.21%, at 13,979.79.
Chipmaker Intel Corp is expected to post a drop in first-quarter revenue later in the day, with analysts looking forward to updates on its U.S. manufacturing plants and chips for automakers amid a global microchip supply shortage. Its shares fell 1.1%.
Advancing issues outnumbered decliners by a 1.48-to-1 ratio on the NYSE and by a 2.35-to-1 ratio on the Nasdaq.
The S&P index recorded 76 new 52-week highs and no new low, while the Nasdaq recorded 74 new highs and seven new lows.
(Reporting by Shivani Kumaresan and Shreyashi Sanyal in Bengaluru; Editing by Anil D’Silva)
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