The Dow Jones Industrial Average finally ran out of steam Thursday as investors cashed in following an historic streak of 13 straight gains.
The 30-stock index fell 237.40 points, or by 0.67%, to 35,282.72 — dragged lower by shares of Honeywell. A pop in the 10-year Treasury yield back above 4% didn't help sentiment either. If it had gained a 14th day on Thursday, the index would have tied its record winning streak going way back to 1897.
The S&P 500 was lower by 0.64% to 4,537.41. At one point during the day, the broader index topped the key 4,600 level for the first time since March 2022. Meanwhile, the Nasdaq Composite slid 0.55% to 14,050.11 as investors took some profits in key tech shares like Microsoft and Apple.
The Dow's winning streak was driven by signs that the economy will dodge a recession, falling inflation data and resilient corporate earnings. Wall Street got more evidence on all those fronts on Thursday.
Meta Platforms shares popped 4.4% on better-than-expected results and strong guidance. The company's numbers were boosted by a rebound in ad revenue. And the latest gross domestic product reading Thursday showed a rise of 2.4% in the second quarter, which was better than the 2% increase expected by economists polled by Dow Jones.
The GDP report also suggested price pressures are easing, with the personal consumption expenditures price index rising 2.6% in the second quarter. That's lower than the 3.2% increase expected by economists, and the 4.1% rise in the prior quarter.
The Dow kept going higher this week even as the Federal Reserve hiked rates to the highest in 22 years on Wednesday. Investors took the rate hike in stride as Fed Chair Jerome Powell said after the decision that the central bank could raise rates again or hold them steady at these levels depending on the data. The central bank meets again in September and traders are betting that upcoming data will cause the Fed to back off.
"Those very high rates that scared me and the market earlier on in the year don't seem to be having as much of a negative effect as I had feared," Wharton School's Jeremy Siegel said on CNBC's "Squawk Box" on Thursday. "And that, combined with the fact that Powell now is saying 'I'm going to look at both sides of the equation,' I think is very positive for the markets."
But the momentum finally ran out on Thursday. Dow-member Honeywell fell more than 5% after bucking the trend of better-than-expected quarterly results with lighter revenue than the Street wanted.
The Dow's 13 straight days of gains is its best winning streak going back to 1987. Thursday could have been quite historic, tying a streak not seen since 126 years ago when Queen Victoria still sat on the throne and a year after the Dow was created. Back then, the Dow listed just 12 stocks; it expanded to 30 stocks in 1928.
— CNBC's Scott Schnipper and Gina Francolla contributed to this report.
The major averages closed lower Thursday, with a historic 13-day rally for the Dow Jones Industrial Average coming to an end. The 30-stock index fell 237.40 points, or by 0.67%, to 35,282.72.
The S&P 500 was lower by 0.64% to 4,537.41. At one point during the day, the broader index topped the key 4,600 level for the first time since March 2022.
Meanwhile, the Nasdaq Composite slid 0.55% to 14,050.11.
— Sarah Min
The S&P 500 has been on a stellar rally of late that has taken it to 4,600 for the first time in more than a year. However, the broader market index is now showing signs of exhaustion, according to Jonathan Krinsky of BTIG.
"As has been the case for the last couple of weeks, there are signals the rally should be getting tired," the firm's chief market's technician wrote. "SPX cleared 4600 off the open, which brought it into the highs from March '22. A flat or red close today would be notable after the gap-up and 4600 test."
— Fred Imbert, Michael Bloom
The major averages are lower shortly into the final hour of trading.
The Dow Jones Industrial Average dropped by 205 points, or 0.58%. The S&P 500 declined 0.57%, and the Nasdaq Composite fell 0.55%.
— Sarah Min
After Wednesday's Fed meeting, one bond trader thinks the end of the central bank's tightening campaign is drawing closer.
"We're getting closer to the endgame," said Gregory Faranello, head of U.S. rates strategy at AmeriVet Securities. "As we head through the summer … those high, high inflation prints from last year will start to roll off."
He noted that June 2022 has marked the peak for inflation, when the consumer price index rose 9.1% from the year-earlier period.
"I think there's a stronger possibility that this turns out to be the last rate hike. But we're going to have to wait and see. I don't think you can fully rule out one more rate hike after this one," Faranello said.
— Fred Imbert
Second-quarter earnings season is nearly halfway through. So far, 44% of S&P 500 companies have reported results, or 219 companies.
This season, earnings are expected to fall 6.8% from a year ago, with revenues expected to be down 0.6%. That's according to the blended growth rate and Refinitiv data.
On the earnings front, 78% of companies have topped expectations, while 62% have beaten revenue estimates. The energy sector is slated for the biggest decline in earnings year over year.
— Samantha Subin, Robert Hum
The Dow Jones Industrial Average was last trading at session lows Thursday afternoon. Earlier in the day, the 30-stock index was higher by 125 points, but those gains evaporated. Shares of Honeywell weighed on the benchmark, down more than 4%.
The Dow was last down 0.2%.
— Sarah Min
Royal Caribbean outpaced the broader market after the cruise line beat expectations on the top and bottom lines in its most recent earnings report. Shares were last higher by more than 8%.
The cruise line posted second-quarter adjusted earnings of $1.82 per share on revenue of $3.52 billion. Analysts polled by Refinitiv had expected per-share earnings of $1.55 on revenue of $3.41 billion.
Other cruise line stocks also popped in afternoon trading. Shares of Carnival and Norwegian Cruise Line Holdings were last up by more than 4% and 5%, respectively.
Royal Caribbean is higher this year by more than 120%.
— Sarah Min
Earnings reports are causing big swings for many stocks on Wall Street today. Here are some under-the-radar moves:
Willis Towers Watson — Shares of the insurance company fell 8% after Willis Towers Watson reported softer-than-expected earnings for the second quarter.
Sunnova Energy — The solar stock slid 10% after Sunnova reported a wider-than-expected loss for the second quarter.
Align Technologies — Shares of the dental products company surged 16% after a surprisingly strong second-quarter report.
Check out the full list of movers here.
— Jesse Pound
There are 42 names in the S&P 500 reaching fresh highs Thursday, many on the back of their recent quarterly reports.
Here are some of those names.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
— Sarah Min, Chris Hayes
Comments from Meta Platforms related to artificial intelligence spending and capital expenditures should bode well for shares of Nvidia, according to Jefferies.
While the social media company reduced its CapEx range for 2023 by about 10% due to lower non-AI servers, it said it plans to shift some spending into 2024 due to postponed projects and equipment deliveries.
"AI spend in near-term appears supported by commentary regarding good ROI from AI infrastructure and 2024 CapEx growth driven by AI," said analyst Mark Lipacis.
— Samantha Subin
A selloff in Honeywell shares on the back of its earnings report is putting the Dow's winning streak at risk.
The industrial stock slid around 5% on Thursday after posting a mixed earnings report for the second quarter. Honeywell reported an adjusted $2.23 in earnings per share, beating the consensus estimate of $2.21 from analysts polled by Refinitiv. But the company said it saw $9.15 billion in revenue for the quarter, under the forecast of $9.17 billion.
Honeywell was the worst performer in the 30-stock average, which traded around flat. Just 12 of the 30 stocks traded down on Thursday, though the other 11 were all less than 1% below their flatlines. Dow, Inc. was the best performing index member on Thursday with an advance larger than 2%.
If the Dow ends Thursday's session down, it would snap a 13-day winning streak.
— Alex Harring
Shares of Costco traded up in Thursday's session, putting the retailer on pace for its 14th straight winning trading day. The last time it saw a streak of that length was 2019.
The stock rose each session between June 3 and June 20 of the year, marking a 14-session streak. That rally ended June 21, when shares finished about 0.5% lower.
The current rally has helped shares reach a price not seen in more than a year on Thursday morning.
— Alex Harring
The Dow Jones Industrial Average has closed positive for 13 straight days thus far during its rally — which has accounted for more than 75% of its year-to-date gains.
As of the close on July 7th, the last close prior to the start of the current win streak, the Dow was up only 1.77% in 2023. As of Wednesday's close on July 26th, the Dow was up 7.16% year to date, and 2,372.87 points. The index gained 1,785.24 points, or 5.29%, during the 13-day rally, accounting for 75.2% of its gains.
— Hakyung Kim
Communication services was the leading sector in the S&P 500, up by more than 2.9% as of midday trading.
The sector was boosted by shares of Meta and Comcast, which were both higher following their most recent earnings beats.
The next highest sector was consumer discretionary, followed by information technology. Meanwhile, industrials and utilities were the two biggest laggards in the index.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
— Sarah Min
June pending home sales rose for the first time in three months. The data showed a rise of 0.3% last month, greater than the estimate of a 0.5% decline from analysts polled by Dow Jones. Pending home sales dropped 2.7% in the prior month.
— Sarah Min
The Dow Jones Industrial Average on Thursday may match a feat last accomplished in 1897 — when Queen Victoria still had three years+ to sit on the throne — but won't come close to equaling the depth of that old record.
While the Dow aims Thursday for a 14th consecutive advance, an accomplishment only reached once before, 126 years ago, the size of this modern expansion is far short of the late Victorian one. Through Wednesday, or day 13, the Dow had rallied 5.29% during its latest run. The 14-day rally in the first months of President William McKinley's administration measured 9.56%.
The Dow Industrials had only been in existence for a little more than a year in 1897, having been created with an initial 12 stocks by Charles Dow in 1896. The average wouldn't expand to 30 stocks until 1928.
The New York Times observed in September 1897 that the advance in stocks over the past year had been "universal and surprising," attributing the gain to an "increase in the country's wealth and earning power during the year."
— Scott Schnipper, Gina Francolla, Bob Pisani
Align Technology was the best-performing stock in the S&P 500, surging more than 19% after beating analysts' expectations in its most recent quarter.
The orthodontics company behind Invisalign on Wednesday reported second-quarter adjusted earnings of $2.22 per share, better than estimates of $2.03 per share, according to Refinitiv. Revenue, and revenue guidance for the year, also beat expectations.
Chipotle Mexican Grill was the biggest decliner in the broader index. The fast-casual chain was off by more than 8% after reporting sales that fell short of analysts' expectations. Chipotle reported revenue of $2.51 billion, lower than the expected $2.53 billion, according to Refinitiv.
— Sarah Min
The major averages opened higher Thursday.
The Dow Jones Industrial Average rose 43 points, or 0.14%. The S&P 500 gained 0.7%, while the Nasdaq Composite added 1.27%.
— Sarah Min
Bank of America upgraded Boeing shares to buy from neutral. The aircraft manufacturer released its second-quarter earnings Wednesday, in which it posted a narrower loss and bigger sales than analysts had predicted.
"Boeing is participating in the commercial aerospace recovery, as part of the global duopoly in large commercial aircraft manufacturing, with some company-specific challenges. ... We expect aircraft deliveries to return to pre-Covid levels by the mid-2020s which in turn should drive cash flow generation and the stock higher," Morgan Stanley said in a Thursday note.
Shares are up nearly 1% Thursday premarket.
The full story about the upgrade can be found here.
— Hakyung Kim
Economists surveyed by Dow Jones were looking for a GDP growth rate of 2.0% in the second quarter.
The 10-year U.S. Treasury yield rose more than four basis points and is trading above 3.89%. Yields move opposite of price, and a basis point is equal to 0.01 percentage points.
The strong economic reading could be seen as a sign that the Fed can keep hiking, though the report also showed softening prices that seem to support the recent drop in inflation readings.
— Jesse Pound