US close: Dow falls for third straight day as investors await PCE data

US stocks finished firmly in the red on Thursday as indices continue to retreat from their recent record highs on the back of mixed economic data.

The Dow finished 0.9% lower at 38,111.48, having now fallen 2.5% in the past three days. The index is now 4.7% lower than its latest record closing high of 40,003.59 reached on 17 May.

Meanwhile, the S&P 500 declined 0.6% to 5,235.48 while the Nasdaq dropped 1.1% to 16,737.08, with both also continuing to pull back from all-time highs..

“Markets tend to move in waves and currently we’re in a repositioning phase where investors are coming to terms with the prospect of interest rates staying higher for longer," said Dan Coatsworth, investment analyst at AJ Bell. "While that has knocked some of the wind out of the sails, it might only take one or two positive economic data points to perk up investor sentiment once again.”

Weighing on sentiment this week has been a two-day surge in the 10-year US Treasury yield on Tuesday and Wednesday to 4.62% – a level not seen since the end of April – as projections for interest-rate cuts by the Federal Reserve continue to be pushed back following hawkish comments from a number of policymakers. Yields eased somewhat on Thursday, with the rate on the 10-year bond falling back down to 4.55%.

There was a flurry of economic indicators released on Thursday, as investors await the Federal Reserve's preferred gauge of inflation on Friday. The price deflator for personal consumption expenditures, or PCE, is predicted to have held steady at 2.8% in April.

Economic data paints mixed picture

Back to Thursday's schedule, according to the Department of Labor, the seasonally adjusted number of initial unemployment claims over the week ended 24 May increased by 3,000 to 219,000, more or less in line with economists' expectations.

US gross domestic product expanded at a revised annualised pace of 1.3% over the three months ending in March, according to the Department of Commerce. This was down from the initial reading of 1.6% due to lower-than-estimated consumer spending, and well below the 3.4% expansion seen in the fourth quarter.

"The new data does not alter our subjective odds that the first rate cut will occur in September, but this is contingent on inflation moderating over the next couple of months," said Ryan Sweet, chief US economist at Oxford Economics.

Meanwhile, US pending home sales slumped 7.7% in April, the biggest monthly drop since September 2022, reversing the 3.6% gain seen in March. The consensus estimate was for a fall of just 0.6%.

Salesforce, UiPath and Kohl's plummet

Salesforce was down 20% after the company cited "elongated deal cycles, deal compression and high levels of budget scrutiny" that impacted first-quarter results, with revenues rising a less-than-expected 11% to $9.13bn. Sales guidance for the current quarter also disappointed.

Another notable faller was software group UiPath which plunged 34% after the abrupt exit of its CEO, leading to the reappointment of its co-founder who stepped down earlier this year. The company also missed forecasts with its second-quarter guidance by a long way.

Department-store chain Kohl's tanked 23% after reporting an unexpected first-quarter loss and missing sales forecasts.

PC maker HP surged 17% after topping earnings estimates for its fiscal second quarter, with the company expressing optimism for its AI-powered computers.

Dow Jones - Risers

Walgreens Boots Alliance, Inc. (WBA) $15.40 3.39%
Verizon Communications Inc. (VZ) $40.33 3.15%
Nike Inc. (NKE) $93.45 1.94%
Amgen Inc. (AMGN) $300.87 1.52%
Travelers Company Inc. (TRV) $212.49 1.15%
McDonald's Corp. (MCD) $252.07 1.08%
Home Depot Inc. (HD) $329.03 1.00%
Visa Inc. (V) $271.30 0.91%
Chevron Corp. (CVX) $158.03 0.87%
Walt Disney Co. (DIS) $101.56 0.81%

Dow Jones - Fallers

Salesforce.Com Inc. (CRM) $218.01 -19.74%
Microsoft Corp. (MSFT) $414.67 -3.38%
Goldman Sachs Group Inc. (GS) $450.23 -1.52%
Merck & Co. Inc. (MRK) $124.53 -1.09%
International Business Machines Corporation (CDI) (IBM) $165.63 -0.85%
Unitedhealth Group Inc. (UNH) $481.48 -0.63%
Walmart Inc. (WMT) $64.89 -0.05%
Dowdupont Inc. (DWDP) $0.00 0.00%
Cisco Systems Inc. (CSCO) $46.12 0.09%
Intel Corp. (INTC) $30.19 0.20%

S&P 500 - Risers

HP Inc (HPQ) $38.36 16.95%
Foot Locker Inc. (FL) $25.89 14.96%
Best Buy Co. Inc. (BBY) $81.36 13.42%
Advance Auto Parts (AAP) $66.85 7.17%
Whirlpool Corp. (WHR) $90.07 6.24%
Sl Green Realty Corp. (SLG) $51.57 5.22%
Leggett & Platt Inc. (LEG) $11.02 5.15%
CVS Health Corp (CVS) $56.04 4.42%
Vornado Realty Trust (VNO) $23.84 4.33%
Bath & Body Works, Inc. (BBWI) $50.75 4.15%

S&P 500 - Fallers

Kohls Corp. (KSS) $21.02 -22.86%
Salesforce.Com Inc. (CRM) $218.01 -19.74%
Hormel Foods Corp. (HRL) $30.79 -9.71%
Agilent Technologies Inc. (A) $131.46 -9.66%
Nektar Therapeutics (NKTR) $1.26 -8.70%
Dollar General Corp (DG) $127.80 -8.14%
Adobe Systems Inc. (ADBE) $445.87 -6.64%
Waters Corp. (WAT) $307.62 -6.11%
Intuit Inc. (INTU) $562.97 -5.90%
Oracle Corp. (ORCL) $117.09 -5.37%

Nasdaq 100 - Risers

Walgreens Boots Alliance, Inc. (WBA) $15.40 3.39%
JD.com, Inc. (JD) $30.21 3.04%
Biogen Inc (BIIB) $220.04 2.63%
Starbucks Corp. (SBUX) $78.78 2.47%
Comcast Corp. (CMCSA) $38.87 2.45%
eBay Inc. (EBAY) $53.35 2.42%
Liberty Global plc Series C (LBTYK) $16.60 2.41%
Paypal Holdings Inc (PYPL) $62.51 2.39%
DENTSPLY Sirona Inc. (XRAY) $27.75 2.32%
Liberty Global plc Series A (LBTYA) $16.15 2.02%

Nasdaq 100 - Fallers

Adobe Systems Inc. (ADBE) $445.87 -6.64%
Intuit Inc. (INTU) $562.97 -5.90%
Autodesk Inc. (ADSK) $199.89 -4.13%
Micron Technology Inc. (MU) $126.29 -4.02%
Nvidia Corp. (NVDA) $1,105.00 -3.77%
Qurate Retail Inc. (QRTEA) $0.71 -3.60%
Microsoft Corp. (MSFT) $414.67 -3.38%
Synopsys Inc. (SNPS) $564.73 -2.67%
Western Digital Corp. (WDC) $75.51 -2.48%
Alphabet Inc. Class C (GOOG) $173.56 -2.16%