Dow struggles to gain traction as Home Depot’s shares weigh

The S&P 500 and the Nasdaq tested fresh records while the Dow struggled to gain traction on Thursday, with investors focusing on a mixed batch of earnings and economic data.

The S&P 500 index

SPX, +0.10%

 edged up 1 point to 2,475, with five of its 11 main sectors trading lower. Materials and industrials among the biggest decliners while telecoms and health-care were leading.

The Nasdaq Composite Index

COMP, +0.13%

was up 3 points to 6,388. If the Nasdaq finishes in positive territory, it will match its longest winning streak since February 2015.

The Dow Jones Industrial Average

DJIA, -0.07%

 was off 15 points to 21,625. Shares of Home Depot Inc.,

HD, -4.33%

which fell over 4%, is on pace for its worst trading day since Jan. 16, 2016, and cutting about 45 points from the price-weighted Dow.

All three main indexes, as well the Russell 2000

RUT, +0.14%

 closed at record levels on Wednesday.

“Overall economic news was solid and supportive of stocks but there were a few earnings misses which is why we are seeing some back and forth,” said Kate Warne, investment strategist at Edward Jones.

But the underlying market sentiment remains positive and investors are correctly responding to continued modest economic growth and on the whole, “very good” earnings, she said.

Jeffrey Saut, chief investment strategist at Raymond James, in emailed notes said he remained sanguine about U.S. equities, despite signs that valuations are overstretched on a short-term basis.

“This does not mean the near-term momentum is over as it should extend into mid-August, but most likely the sideways movement over the past few weeks is coming to an end,” he wrote. “To reiterate, any downside pressure should continue to be muted while the conditions by the end of next week favor the upside.”

Ahead of the market open, weekly jobless claims plunged, highlighting a labor market that has conveyed consistent signs of health. Meanwhile, a reading of manufacturing from Philadelphia, known as the Philly Fed, manufacturing cooled to a reading of 19.5 from 27.6 in June.

Need to Know: Here’s where a storm’s a-comin’ for investors, this global forecast says

The European Central Bank left key rates unchanged, but President Mario Draghi was vague about future asset purchases, stressing a tightening of financial conditions due to euro’s recent appreciation.

Check out: Recap of live blog of the ECB’s news conference

European stocks were mixed with the STOXX Europe 600 index

SXXP, -0.38%

 off 0.4%. However, currency traders continued to bid up the shared currency, which rose 1% to trade at $1.1635, having appreciated by more than 10% since the start of the year.

See: Nobody told the euro that Mario Draghi was dovish

Read: BAML’s Hartnett sees global snub for U.S. stocks as more fuel for upside

Stocks in focus: Philip Morris International Inc.

PM, -1.61%

 shares fell 1.4% after the cigarette maker lowered guidance and revenues and delivered an earnings miss.

Shares of Travelers Inc.

TRV, -1.53%

shed 1.8% after the insurer posted a lower profit amid higher catastrophe and weather-related losses. The stock, a Dow component, was one of the biggest losers on the blue-chip average.

Shares of Lowe’s Companies

LOW, -5.88%

 dropped 6%, falling in tandem with Home Depot, on news that Sears Holdings Corp.’s

SHLD, +13.25%

will sell appliances through

AMZN, +0.01%

Kinder Morgan’s

KMI, +4.75%

 shares rallied 5.2% after the company announced a dividend hike, buyback plan and second-quarter results.

Check out: Preview of Microsoft earnings

Qualcomm Inc.

QCOM, -4.58%

 fell 5.6%, after the chip maker’s quarterly earnings met forecasts late Wednesday, but its forecast made no mention of sales related to Apple Inc.

AAPL, -0.14%


Shares of T-Mobile US Inc.

TMUS, -0.19%

TMUS, -0.19%

initially rose after strong second-quarter earnings from the wireless carrier late Wednesday, but reversed to trade slightly lower.

Microsoft Corp.

MSFT, +0.19%

Visa Inc.

V, +0.20%

eBay Inc.

EBAY, +0.35%

 and Capitol One Financial Corp.

COF, -1.21%

 are among those companies reporting after the close.

Read: Qualcomm’s issues go beyond Apple fight

Other markets: Stocks rose in Asia

ADOW, +0.30%

 after the Bank of Japan pushed back on its inflation target, which fueled some hopes for more monetary stimulus.

The ICE Dollar Index

DXY, -0.59%

 sank, especially against the euro

EURUSD, +1.0073%

Oil prices

CLU7, -0.70%

retreated, giving up earlier gains to trade lower, while gold prices

GCQ7, +0.27%

 picked up steam on the back of the weaker dollar.

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