U.S. stocks traded lower on Thursday, giving back their initial gains, as investors eyed ongoing negotiations between Greece and its creditors.
“We’re going to be held hostage with our perception of what’s going on in Greece,” said Art Hogan, chief market strategist at Wunderlich Securities.
The major averages struggled to hold gains amid reports that the meeting between Greece and its creditors was halted “indefinitely.” The meeting later resumed, but ended without a deal being struck.
“The fear premium is so baked in to this market,” said Adam Sarhan, CEO of Sarhan Capital. He noted pressure from continued weakness in the Dow transports, which fell deeper into correction territory on Thursday. “It appears there’s lots of bullish fatigue out there.”
The Dow transports traded 0.76 percent lower, extending a near-2 percent decline from the prior day. Avis Budget Group plunged nearly 6 percent as the greatest laggard.
On Wednesday lack of resolution in a meeting between Greece and its creditors weighed on U.S. stocks, which closed lower. The country’s creditors rejected Athens’ proposed plan to end its financial crisis before submitting counterproposals.
In order to avoid defaulting on its 1.6 billion euro debt, Greece needs additional financial aid by the end of this month.
“[Greece] definitely has an impact [on stocks], but not to the degree it has on Europe,” said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. “There are a lot of traders saying this is a done deal; it’s just a matter of what the final score is going to be.”
European equities ended mixed, with the pan-European Stoxx 600 and the FTSE 100 indexes closing lower, while the French CAC 40 and the German DAX ended flat.
On another note, several hospital stocks, including HCA Holdings,Tenet Healthcare, Community Health Systems and Universal Health Services, also jumped more than 5 percent Thursday morning after the U.S. Supreme Court ruled that federal subsidies that help nearly 6.4 million people pay for their Obamacare health plans are legal under the Affordable Care Act.
Investors also watched U.S. economic data. Weekly jobless claims came in at 271,000, slightly below analysts expectations.
“We’ve been under 300,000 [jobless claims] for a while now, and that suggests the labor market continues to heal,” said Greg Woodard, portfolio strategist at Manning & Napier Advisors, adding that this trend leads to expectations of a Federal Reserve rates increase by the end of 2015.
U.S. consumer spending rose 0.9 percent for the month of May, its largest gain in nearly six years while personal income increased 0.5 percent last month.
“The income component was encouragingly driven by the wage and salary side as it was up .5% m/o/m, the best since January and was higher by 5 percent year-over-year,” Peter Boockvar, chief market analyst at The Lindsey Group, said in a note. “Bottom line, Q2 GDP spending figures will be revised modestly higher due to the 0.6 percent REAL spending increase versus the estimate of up 0.4 percent.”
“I think what the market is seeing is a firming economy, but is it growing?” said Tom Wright, director of equities at JMP Securities. “We’re wrapping up the first half of the year with very low volatility and it will be interesting to see what the second half brings.”
The services PMI fell from 56 in May to 54.6 in June, showing a slower growth rate in the services sector.
The Kansas City Fed manufacturing index improved month-over-month in June, coming in at -9, while it came in at -13 in May.
In other news, U.S. crude futures traded 1 percent lower at $59.60 after the EIA reported a weekly natural gas build of 75 billion cubic feet.
Yields on benchmark U.S. 10-year notes trimmed gains to 2.39 percent following a $29 billion seven-year notes sale at a high yield of 2.153 percent.
The euro traded flat against the dollar at about $1.12.
In corporate news, BlackBerry announced a 12-million common stock buyback program to offset dilution from a new employee stock purchase plan.
Bank of America Merrill Lynch raised its rating on drug maker Eli Lillyto “buy” from “neutral”, on increased estimates for several drugs still in Lilly’s pipeline.
BB&T began coverage of apparel retailer L Brands with a “buy” rating, saying the parent of Victoria’s Secret and Bath & Body Works has strong management and good brand positioning.
IAC/InterActiveCorp also announced plans to spinoff The Match Group, which owns a number of dating sites, including Match.com.
Shares of retailer Kroger rose more than 1 percent after announcing a 13.5 percent dividend increase and a 2-for-1 stock split.
Humana‘s stock was briefly halted for volatility after a report surfaced indicating Aetna was close to acquiring the company. The company’s stock rose about 8.5 percent after resuming trading, and last traded up more than 7.5 percent.
The S&P 500 traded down 0.39 points, or 0.02 percent, at 2,108, with telecommunications leading four sectors higher and energy the greatest decliner.
The Nasdaq traded down 2 points, or 0.06 percent, at 5,119, with the iShares Biotechnology ETF trading down 0.33 percent.
About two stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of 347 million and a composite volume of nearly 1.75 billion as of 2:05 p.m.
Gold futures were down 40 cents at $1,172.50 an ounce in early afternoon trade.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 13.