US stocks fell from previous days’ record highs at midsession on Thursday after the latest clutch of earnings reports rang in, The European Central Bank delivered its post-Brexit prognosis, and regulators looked to put a stop to a health insurance sector mergers worth $85bn.
Even news that ExxonMobil (NYSE:XOM) had agreed to buy InterOil Corp (NYSE:IOC), a US company developing a large onshore natural gas project in Papua New Guinea, in a deal valued at up to $3.6bn, failed to lift the bourse, or their respective shares. ExxonMobil shares were down 0.24% to $93.70. InterOil fared worse, down 0.6% to $48.77.
Similarly, buoyant June existing home sales and the lowest US jobless claims since April failed to lift the bourse.
The bellwether S&P 500 index was down 0.4% to 2,162, having flirted with the intraday highs just above 2,175 recorded the previous session which itself had followed more than a week of ever-higher record closes and ever-higher record intraday levels.
The US Justice Department on Thursday moved to block mergers by suing to prevent Anthem (NYSE:ANTM) from acquiring Cigna Corp (NYSE:CI) and halt Aetna’s (NYSE:AET) planned purchase of Humana (NYSE:HUM). Still, all four insurers made comfortable share gains this session.
The S&P Midcap 400 was down 0.6% to 1,540, and led by Graco Inc (NYSE:GGG). The industrial goods maker was down 9.6% to $72.62. On Wednesday the stock reported second quarter earnings which underwhelmed Zacks analysts and they in turn reminded investors of that today in a note.
“Graco’s quarterly net income per share of 89 cents missed the Zacks Consensus Estimate by 10.1%,” said Zacks.
Meanwhile, the S&P Smallcap 600 shed 0.7% to 736 – territory it has been familiar treading for weeks – and was led by Essendant Inc (NASDAQ:ESND), a consumer products maker, which was down a whopping 36.8% to $20.55 but on no specific news.
Mario Draghi, the President of the ECB, urged caution in reading forecasts for Eurozone economic data following Britain’s decision to quit the European Union last month. He forecast a 0.3-0.5% annual growth drop for the next three years in the currency bloc, but said that it was too early to make a firm guess. More data is expected in September. The European Union expects Britain’s economy to shrink by 0.3% next year, but the International Monetary Fund sees it growing by 1.3%, albeit down 1 percentage point from pre-Brexit forecasts.
Pre-Open
Wall Street shares are poised for a mixed to lower open as traders take the cue from lower markets in Europe and await more US earnings.
FTSE100 is down 28 in London at the time of writing, while the French and German benchmarks are also lower.
US crude is nudging higher, up 0.45% at US$44.85, while gold is also ahead - up 0.14%.
Investors are focusing on an update due from European Central Bank President Mario Draghi, and for more US macro data and earnings.
Yesterday, stocks gained, the S&P 500 bellwether closing up 0.4% at 2,173 – a fresh record high – as well as hitting a fresh intraday record high of 2,175.63, the technology sector did much to power that latest historical achievement.
The Dow Jones finished 36 ahead at 18,595, the Nasdaq gained 53 to 5,089 and the S&P500 added 9.24 at 2,173.
In futures trading, the Nasdaq is 3.25 ahead; the S&P500 is down 2.25, while the Dow Jones is 28 lower.
There's a clutch of companies posting quarterly updates this morning, including General Motors (NYSE: GM), Southwest Airlines (NYSE:LUV), Domino's Pizza (NYSE:DPZ) and Dunkin' Brands (NYSE:DNKN).