Dow makes up losses, S&P 500 trades within striking distance of 5,000 milestone

U.S. stocks were looking to shake off earlier losses Thursday afternoon, with the S&P 500 within striking distance of crossing the 5,000-point level for the first time ever.

How are stocks trading

  • The Dow Jones Industrial Average
    was up 1 point, or less than 0.1%, at 38,680.

  • The S&P 500
    was off by less than 0.1%, at 4,994.

  • The Nasdaq Composite
    was up 30 points, or 0.2%, at 15,786.

On Wednesday, the Dow Jones Industrial Average rose 0.4%, to 38,677; the S&P 500 increased 0.82, to 4,995; and the Nasdaq Composite gained 1%, to 15,757. U.S. stocks are on track to climb for the 14th week out of the past 15, on pace to match the best 15-week stretches in history.

What’s driving markets

Wall Street’s main stock barometer was on the cusp of a major milestone after the S&P 500 finished Wednesday’s session a whisker shy of topping 5,000 for the first time.

“It looks like investors are determined to pass this 5,000 level, in spite of the fact of higher yields since this morning,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “It’s the consistency of good earnings that are pushing the market higher.”

The benchmark 10-year Treasury yield
was up 3 basis points to 4.15% on Thursday, almost 30 basis points above its early-February low, according to Dow Jones Market Data.

The S&P 500 on Wednesday set an intraday high of 4,999.89 on Wednesday and closed at a record 4,995.06. Thursday was shaping up to be a more placid session, with few catalysts available to drive the market other than a handful of earnings reports, said Mike O’Rourke, chief market technician at JonesTrading.

O’Rourke said the market remains top-heavy, with the most valuable companies continuing to drive the S&P 500 and Nasdaq higher. However, a rotation has taken place as Tesla Inc.
and Apple Inc.
two members of the “Magnificent Seven” group of megacap technology names, have lagged the market in the new year.

This has created space for companies like Eli Lilly & Co.
which recently saw its market capitalization surpass Tesla’s to join the top-eight most valuable U.S. companies, according to FactSet data.

“You’re still seeing the market leaders continue to push the market higher, but it’s not the same seven names,” O’Rourke told MarketWatch.

See: Stock-market investors fear a megacap meltdown. Here’s what history says.

The S&P 500 has continued to climb in 2024, pushed to record highs on optimism over corporate earnings, a solid U.S. economic backdrop and acceptance that interest rates aren’t likely to fall until later this year.

“Of course, as we head into the last innings of the earning season, the market is probably heading for some sort of a pullback,” Spartan Capital’s Cardillo said.

“March also is always a murky month for the stock market,” he said, adding that commercial real estate and regional banks also look like a looming problem — nearly a year after the collapse of three regional lenders, including Silicon Valley Bank, last March.

Investors on Thursday were focused on earnings results from Walt Disney Co.
released after Wednesday’s closing bell, which added to positivity, while there was a disappointing earnings update from PayPal Holdings Inc.
There also was a 20% pop in shares of Arm Holdings Plc
after the chip designer delivered upbeat guidance and pointed to “increasing demand for new technology driven by all things AI.”

Much of the S&P 500’s 30% surge since Jan. 1, 2023, has been powered by the expectation that large tech companies such as Microsoft Corp.
and Nvidia Corp.
can deliver an AI-related boost to earnings.

Thursday’s earnings include a mixed bag, with oil exploration company ConocoPhillips
shares rising after it beat expectations for profit and sales, while shares of uranium producer Cameco
and confectionary giant Hershey Co.
slumped after reporting their results and guidance.

After the bell, investors will receive results from Affirm
and Expedia

U.S. economic data published on Thursday included a weekly report on initial jobless claims, which showed that the number of Americans applying for unemployment benefits during the first week of February fell by 9,000 to 218,000. The data indicated that layoffs remain extremely low, despite a flurry of headlines about layoffs at technology and media companies, among others. Wholesale inventories in the U.S. rose by 0.4% in December.

Companies in focus

  • Under Armour Inc.
    shares rose after the apparel company reported fiscal third-quarter profit that surpassed analysts’ estimates.

  • New York Community Bancorp Inc.
    shares were falling again on Thursday after an analyst downgraded the stock on concerns that depositors might start to flee.

  • Spirit Airlines Inc.
    shares rose on Thursday after the company posted a slimmer loss than expected for the latest quarter, while calling out encouraging booking trends and expressing confidence in its ability to return to profitability.

  • Wynn Resorts Ltd.
    shares gained after the company posted fourth-quarter adjusted earnings that beat analysts’ expectations.

—Jamie Chisholm contributed to this article

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