Stocks Edge Lower After Dramatic Rally

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U.S. stock slid Thursday as investors parsed through another batch of earnings and data on the labor market.

The S&P 500 dropped 0.2% shortly after the opening bell. The technology-heavy Nasdaq Composite slipped 0.1%. The Dow Jones Industrial Average fell 0.4%.

The declines come after stocks jumped on Wednesday, reversing losses from earlier in the week. Many investors remain upbeat about the outlook for shares, but are growing concerned that a surge in coronavirus cases globally could delay plans to reopen economic activity. India on Thursday reported the world’s biggest one-day rise in new infections.

“It wouldn’t take much news for [investors] to start ripping up their reopening playbook,” said Christopher Jeffery, head of inflation and rates strategy at Legal & General Investment Management. “The market has gone from a world of not questioning it to starting to question it,” he said, adding that his team is following the rise in cases in Michigan closely.

Earnings season continues apace.

Shares of


jumped 16% after the credit-reporting agency late Wednesday raised financial projections for the year and said it expects to buy back more than $100 million worth of stock.

Blackstone Group

shares gained 2.4% after the private-equity firm swung to a record profit of $1.75 billion in the first quarter.


and Snap are among companies scheduled to report results after markets close.

On the economic front, worker filings for jobless claims reached another Covid-19 low of 547,000 last week. The decline is a sign the labor market is strengthening.

Bond yields steadied. The 10-year U.S. Treasury yield ticked down to 1.561% from 1.566% Wednesday. Yields, which move in the opposite direction to bond prices, have fallen from a high of 1.749% in late March.

Jason Borbora-Sheen, multiasset portfolio manager at Ninety One, said he expects the broad stock market to trend sideways or decline over the next few months. “Things have become quite overbought,” he said.

One of the two funds Mr. Borbora-Sheen manages has bought put options to protect against downward moves in stocks. Puts are contracts that pay out if the underlying asset falls below a certain price.

In overseas markets, shares of tech and utility companies led the Stoxx Europe 600 up 0.5%.

Shares of Credit Suisse Group fell 2.5% after the Swiss lender said it would issue new shares after losses from Archegos Capital Management wiped out a strong first quarter. Renault shares lost 2% after the French car maker said revenue fell in the first quarter.

The European Central Bank left its key interest rates and bond-buying programs unchanged, seeking to maintain support for governments and companies through a new round of coronavirus infections and restrictions. The euro edged down 0.1% to $1.2027.

In Asia, chemical and pharmaceutical stocks helped Japan’s Nikkei 225 climb 2.4%. China’s Shanghai Composite Index ticked down 0.2%.

—Amber Burton contributed to this article.

Traders worked on the floor of the New York Stock Exchange on Wednesday.


Courtney Crow/Associated Press

Write to Joe Wallace at

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