New York: US stocks edged lower on Thursday, hurt by a slide in drugmaker Merck and as falling commodities prices hit shares of natural resource companies.
The S&P 500, however, held near 28-month highs as investors saw stocks’ upward trend continuing, focusing on expectations for strong earnings.
Intel Corp confirmed those bets as it posted better-than-expected quarterly earnings and forecast strong revenue for the coming quarter after the closing bell. Its shares rose 2.7% to $21.87 following a 0.06% dip during regular trading hours.
During Thursday’s session copper prices retreated from recent highs on concerns of slowing demand from China. Freeport McMoRan Copper & Gold lost 3.1% to $118.07, and the S&P materials sector fell 0.8%.
“The fact the commodities market is trading down is what’s putting pressure on materials shares,” said Tom Schrader, managing director of US equity trading at Stifel Nicolaus Capital Markets in Baltimore.
Merck & Co dropped 6.6% to $34.69, accounting for more than half the losses in the Dow industrials, after it stopped giving a blood clot preventer, one of its most important experimental drugs, to some patients.
The S&P healthcare index fell 0.54%.
Weekly initial jobless claims jumped to their highest level since October last week while food and energy costs lifted producer prices in December, pointing to headwinds for an economy that has shown fresh vigor.
A surge in exports to their highest level in two-year helped narrow the US trade deficit in November, an encouraging sign for positive surprises in the current earnings season.
The Dow Jones industrial average fell 23.54 points, or 0.20%, to 11,731.90. The Standard & Poor’s 500 Index dropped 2.20 points, or 0.17%, to 1,283.76. The Nasdaq Composite Index dipped 2.04 points, or 0.07%, to 2,735.29.
The benchmark S&P 500 has gained 22.3% since the start of September.
About 7.57 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year’s estimated daily average of 8.47 billion.
Advancing stocks trailed declining ones on the NYSE by 1,363 to 1,622, while on the Nasdaq, more than 5 stocks fell for every four that rose.
JPMorgan fell 0.6% to $44.45 ahead of its results, expected before the market’s open on Friday. Its shares have risen 4.8% so far this year.
Earnings from S&P 500 companies are expected to rise 32% in the fourth quarter compared to a year ago.
Despite Intel’s beat and the rise in its shares, S&P 500 futures were flat late Thursday. In the previous two quarters when the technology bellwether beat Wall Street estimates, the broad US stocks benchmark ended the sessions in the opposite direction as Intel shares.
Marathon Oil Corp gained 6 percent to $42.98 after it said it would spin off its refinery and pipeline operations into a stand-alone company.
Easing recent worries about the credit crisis in Europe, Spain and Italy followed Portugal with successful debt sales on Thursday. The euro rose 1.7% against the US dollar, its best day in six-month.