U.S. stocks retreated Thursday to close lower, giving back some of the previous day’s Federal Reserve-inspired gains as a fall for health-care and utilities stocks pushed the market into negative territory.
The SP 500 index
finished down 3.88 points, or 0.2%, at 2,381.38, with health-care off 0.9%, led by 4% drops in Biogen Inc.
and Illumina Inc.
shares. Utilities led losing sectors, finishing down 1.1%. The financials, tech, consumer-discretionary and consumer staples sectors finished fractionally higher out of the broad-market benchmark’s 11 sectors.
“We were very excited yesterday because the Fed was less hawkish than we had thought, and that boosted the market,” said Karyn Cavanaugh, senior market strategist at Voya Financial, in an interview. “That euphoria has worn off. The market realizes it may have gotten a little ahead of itself.”
See: Investors bet the Fed is getting back to ‘normal’
The Dow Jones Industrial Average
declined 15.55 points, or less than 0.1%, to finish at 20,934.55, as shares of DuPont
declined 1.1%, Chevron Corp.
shares slid 0.9%, and Merck Co.
shares fell 0.8%.
The Nasdaq Composite Index
however, turned positive in the final minutes of trading, and finished up 0.71 points at 5,900.76, having briefly trading above its March 1 closing record earlier in the session. The iShares Nasdaq Biotechnology ETF
which closed down 1.3%, helped to drag on the tech-laden index.
Read: The market’s reaction was not what the Fed wanted, Goldman economist says
Stock markets rallied on Wednesday after the Federal Reserve raised interest rates by a quarter-point. The central bank’s anticipated path of future rate increases was seen as less hawkish than expected by market participants, giving a boost to equities.
Fed enters new phase of raising rates
WSJ’s Jon Hilsenrath explains why the Federal Reserve’s decision Wednesday to raise short-term interest rates signals a new tightening phase due to the healthy economy. Photo: EAP
“Markets took it as a dovish signal that the Fed is going to only cautiously tighten as the economy improves. The message was that the economy is firing but inflation is not going to be an issue. It’s in no hurry to raise rates and that is good news for equities,” said Neil Wilson, senior market analyst, in a note.
Read: Fed rate hikes + low growth = recession, says strategist
prices fell 0.2% to $48.75 a barrel, following an earlier jump of about 1% due to a weaker dollar, on renewed oversupply concerns. The SP 500’s energy sector closed down 0.6% Thursday.
“It appears that oil prices are putting pressure on the energy sector again,” said Mark Kepner, managing director of sales and trading at Themis Trading. “If oil prices fall to about $40 a barrel, stocks can run into some trouble, not only because of the energy sector losses but implications on inflation.”
The dollar dropped roughly 1% after the Fed announcement and continued lower on Thursday. The ICE Dollar Index
fell 0.5% to 100.25, according to FactSet data.
The weaker greenback boosted dollar-denominated commodities, such as gold, with the yellow metal
settling up 2.2% at $1,227.10 an ounce.
Dutch election: Trading sentiment in Europe and the U.S. was also buoyed by the preliminary result of the Dutch election. With most of the votes counted, Prime Minister Mark Rutte’s party looked to have won the most seats in parliament, defeating populist, far-right candidate Geert Wilders.
Read: Euro hits five-week high on Dutch election
The vote in the Netherlands has drawn attention globally as it has been seen as a bellwether for the string of elections taking place in Europe later this year, including France in April, Germany in the fall and potentially Italy in the summer. Across the continent, anti-EU, populist parties are racing ahead in the polls, raising concerns some countries could leave the eurozone or the EU.
“Markets will of course now turn their attention to France, where the candidacy of the far-right Marine Le Pen arguably poses greater risks,” said Anna Stupnytska, global economist at Fidelity International, in a note.
Economic news: Weekly jobless claims fell by 2,000 to 241,000 in mid-March, as layoffs remained near the lowest level in decades, in line with expectations.
Meanwhile, the Federal Reserve Bank of Philadelphia’s monthly index on regional manufacturers fell to 32.8 in March from 43.3 in February—the highest reading in 33 years, according to data released Thursday.
See: MarketWatch’s economic calender
left its key interest rate at a record low of 0.25% as expected. The pound
jumped as high as $1.2377, but was last up at $1.2300, compared with $1.2269 ahead of the decision.
Stock movers: Shares of Oracle Corp.
closed up 6.2%, after the software giant late Wednesday reported fiscal third-quarter earnings above expectations.
rallied nearly 16% after the sports-camera maker late Wednesday announced job cuts and said it expects to be profitable on an adjusted basis in 2017.
fell 11% after the company’s late-Wednesday earnings report missed forecasts.
gained 2.3% after the retailer late Wednesday reported earnings that beat forecasts and raised dividends.
Dollar General Corp.
shares rose 0.6% after the discount retailer reported fiscal fourth-quarter profit and sales that beat expectations.
Shares of Snap Inc.
finished down 4.2% at $19.89, closing below $20 for the first time since its public debut earlier in the month. The stock of the disappearing-message company hit a high of $29.44 on March 3.
priced its initial public offering at C$17 a share, or $12.79, above the expected range of $C14 a share to C$16 a share. Shares jumped 26% in its debut.
Other markets: Stocks in Asia closed sharply higher, rallying after the Fed announcement.
It was the same sentiment in Europe, where the benchmark Stoxx Europe 600 index
traded at its highest since December 2015.
—Sara Sjolin in London contributed to this article.