US open: Hawkish Fedspeak, company results weigh on Wall Street

Hawkish Fedpseak overnight pushed Wall Street off its lofty perch against a backdrop of sharp share price falls for Macy's and Snapchat which appeared to dent sentiment.

As of 1625 BST the Dow Jones Industrials was down by 0.40% to 20,856.54, while the S&P 500 was slipping 0.50% to 2,387.63 and the Nasdaq Composite losing 0.54% to 6,095.67.

Speaking on Wednesday evening, the president of the Federal Reserve bank of Boston, Eric Rosengren, said three more interest rate hikes were still in appropriate in 2017.

Combined, the news from the Fed and the latest company results appeared to give investors looking for reasons to continue buying into the market pause for thought.

On a related note, analysts at Bank of America-Merrill Lynch pointed out how the S&P 500's forward price-to-earnings ratio - at 17.5 - was at its highest since 2004 and 15% above its long-term average.

"The S&P 500 trades at a 13-year high. Stocks looks cheap vs. bonds but stretched vs. history; large is cheaper than small," BofA-ML said.

From a sector standpoint, the worst performing industry groups were: Travel&Leisure (-3.50%), Retail REITs (-2.22%) and Real Estate Services (-2.10%).

In economic news, initial weekly unemployment claims dipped by 2,000 to 236,000 over the week ending on 6 May (consensus: 245,000).

Meanwhile, producer prices rebounded in April, increasing at a 0.5% month-on-month clip (consensus: 0.2%).

Macy's stock was ground underfoot by investors, falling 13%, after posting first quarter earnings per share of 24 cents, leaving analysts looking for EPS of 35 cents startled.

Snap shares were down a whopping 19% on the heels of its maiden earnings release as a publicly-listed outfit.

The company went public on 3 March at $17 per share, before quickly rising as high as $29. After Thursday’s losses, Snap now sits at $18.66 per share.

Meanwhile, Kohl's shares were down 7% after the grocer reported better-than-expected earnings for the first quarter, but weaker sales. Net income came in at $66m or 39 cents a share, up from $17m or 9 cents a share in the first quarter of last year, but sales fell to $3.84bn from $3.97bn.