Investing.com – Wall Street took a breather on Thursday and traded lower despite a handful of upbeat economic reports, after a recent rally that President Donald Trump dubbed the “longest winning streak in decades” may have caused markets to opt for consolidation before making their next move.
At 12:13PM ET (17:15GMT), the Dow Jones fell 28 points, or 0.13%, the S&P 500 lost 6 points, or 0.26%, while the Nasdaq Composite traded down 18 points, or 0.31%.
President Donald Trump hit headlines as he showed his enthusiasm for recent record highs in stocks in his first tweet of the day on Thursday.
“Stock market hits new high with longest winning streak in decades,” he tweeted, adding that there was a “great level of confidence and optimism - even before tax plan rollout!”
Experts disagreed over the validity of his statement as it was unclear as to exactly what “winning streak” the President was referring to.
Trump has been credited with being a major catalyst behind Wall Street's impressive rally since election day, with some dubbing it the "Trump Jump", “Trump rally” or “Trump trade” as investors welcomed his promises of tax reform, infrastructure spending and deregulation.
The fact is that all three major indices closed at fresh highs Wednesday for a fifth-straight day, the best run in 25 years, as traders continued to bet on a pro-growth agenda under President Trump.
Others provided arguments that the seven-day rise in the S&P was only the best since 2013, while the five days of gains for the Dow saw its match last September and Nasdaq, up seven session, saw that a similar upside streak ending just last January 11.
But Business Insider pointed out other impressive statistics that began even before Trump’s November win such as the fact that stocks haven’t registered a 1% decrease since October 11, its longest run since at least 2006 or the fact that the current bull market run began on March 9, 2009 was now the second longest in history, following behind the streak from 1987 to 2000.
The financial news publication also noted that the seven consecutive record-high closes in the Nasdaq Composite was its longest streak since 1999.
That date is not without its irony as Investing.com noted Thursday in its weekly comic that “recent gains have led to speculation of a near-term reversal with some fund managers likening the current stock market euphoria to the dotcom bubble, which reached a peak on the last day of 1999 and then burst dramatically.”
Whether or not Thursday’s current pause is simply a healthy consolidation of gains or a response to the call of bears claiming that stocks have gone too far too fast remains to be seen.
However, it was clear that a handful of positive economic reports were insufficient to convince traders to continue to pour more money into equities on Thursday.
Weekly jobless claims continued to show a solid labor market as they came in lower than expected. Experts at Bespoke noted that the reading has been below 240,000 in five of the last seven weeks and highlighted that “they didn’t go below 240,000 once between December 1973 and December 2016”.
The Philadelphia Fed manufacturing index showed that activity in the sector soared to 43.3 in February, soaring past expectations at its highest level since 1984 on the back of the biggest one-month gain in the reading since June 2009.
"Business activity expanded at a solid clip in New York State," the report from the New York Fed noted. "Indexes for the six month outlook suggested that respondents remained highly optimistic about future conditions."
The housing market also showed solid indicators as building permits hit a 14-month high in January. Although housing starts actually fell after an upward revision to December’s data, the number of units still settled 22,000 above forecasts.
Despite the better-than-expected data, the dollar broke an 11-day winning streak on Thursday, falling back against the euro, yen and the basket of currencies that measures its broader strength after hitting its highest in a month a day earlier at 101.75.
Comments by Federal Reserve (Fed) chair Janet Yellen in testimony to Congress this week showed that the central bank was on track to continue with gradual rate hikes and had supported the greenback.
On Thursday, Fed vice chairman Stanley Fischer noted that he expected the labor market to strengthen further and said in the interview on Bloomberg Television that inflation was moving towards the 2% target.
Fischer further repeated the idea that rate hikes would be gradual though he refrained from specifying how many there would be.
The Atlanta Fed president Dennis Lockhart told the same news agency in a later interview Thursday that he “could probably go either way” on a March rate hike.
Lockhart also insisted that the Fed could hike in May or any of the meetings without a press conference.
In any case, it should be noted that Lockhart will retire in 12 days, before the March meeting.
In big moves on earnings, Avon Products (NYSE:AVP) tanked 18% as a 2.4% drop in revenue caused the cosmetic maker to miss consensus.
Shares in TripAdvisor Inc (NASDAQ:TRIP) also sank nearly 9% on Thursday as the online travel company disappointed on both the top and bottom line.
Dean Foods (NYSE:DF) slumped 7% as the largest U.S. dairy processor issued a first-quarter profit guidance well below consensus.
On the upside, Cisco Systems (NASDAQ:CSCO) jumped nearly 3% as revenue in the blue-chip’s security business, which offers firewall protection and breach detection systems, rose 14% to $528 million, beating analyst forecasts for $519.1 million.
Also in the headlines, Snap Inc, owner of the popular messaging app Snapchat, was reported to be seeking a valuation of between $16.20 billion and $18.52 billion in its highly awaited initial public offering, below speculation that had pointed to a range of $20 to $25 billion.
Meanwhile, oil prices moved lower in U.S. midday trade on Thursday turning around from initial gains on the back of OPEC sources cited by Reuters who said the reduction in crude production could be extended or deepened at the May meeting if oil stocks are still too high.
Oil prices have been stuck in a narrow range around the lower-to-mid-$50s over the past two months as investors weigh the impact of cuts in supply from the historic OPEC/non-OPEC agreement against record stockpiles of crude and increased drilling activity in the United States.
U.S. crude futures lost 0.36% to $52.92 by 12:15PM ET (17:15GMT), while Brent oil traded down 0.77% to $55.32