U.S. stocks traded in a range Thursday, trying for a third-straight day of gains, amid bank earnings and choppy trade in oil.
“It’s perfectly normal to see the market pause here for two reasons,” said Adam Sarhan, CEO of Sarhan Capital. “First, to digest the very strong rally we’ve had in the last two days, and we’re pausing right below key resistance levels, which are last year’s highs.”
“Today’s action is very constructive.”
Information technology was the greatest laggard in the S&P 500, while financials led the benchmark index.
“Everything is pretty muted gains and losses today, which isn’t bad after yesterday’s gains,” said Nick Raich, CEO of The Earnings Scout.
“Second quarter (earnings) should come in a little better than what we’re seeing in the first quarter. This should be a low point in earnings and sales,” he said.
U.S. crude oil futures were mildly higher, trading near $42 a barrel as of 11:36 a.m. ET. Ahead of Sunday’s highly anticipated meeting of producers in Doha, Qatar, the International Energy Agency (IEA) trimmed its forecast for demand growth but said a fall in U.S. oil output was accelerating.
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In economic news, weekly jobless claims declined to a seasonally adjusted 253,000, revisiting a level last seen in 1973.
The consumer price index rose 0.1 percent last month. In the 12 months through March, the core CPI that strips out food and energy costs, rose 2.2 percent after gaining 2.3 percent in February, Reuters said.
“It just tells us we’re not getting much closer to that section of the dual mandate,” said Art Hogan, chief market strategist at Wunderlich Securities.
Treasury yields held higher, with the 2-year yield near 0.75 percent and the 10-year yield around 1.79 percent. The Treasury is scheduled to hold a 30-year bond auction in the afternoon.
The U.S. dollar index traded mildly higher, with the euro near $1.126 and the yen at 109.25 yen against the greenback.
Gold traded about $16 lower.
The rally “is getting a little overcooked here,” said John Caruso, senior market strategist at RJO Futures.
“You’ve got your safe havens liquidating at the moment,” he said.
Financials rallied Wednesday following JPMorgan’s earnings beat to help the major stock indexes close at their highest levels of the year so far. The sector is about 4 percent lower year-to-date as the worst S&P 500 performer.
“I think you’re definitely getting a relief rally based on … the earnings (are) actually OK. The earnings weren’t great but they kind of met expectations,” said Peter Coleman, head trader at Convergex.
Ahead of a scheduled public appearance, Atlanta Federal Reserve Bank President Dennis Lockhart said on Bloomberg Radio he no longer expects to advocate for a U.S. interest rate hike in April, but added there is still time for two or three rate hikes this year, Reuters reported. If there is no rebound this quarter from apparently weak first-quarter growth, he said he would advocate caution in interest rate policy.
Bank of America reported an 18 percent slide in quarterly profit as concerns about a global economic slowdown and uncertainty about the pace of U.S. interest rate increases dampened bond and stock trading.
BlackRock, the world’s largest asset manager, posted a 20 percent drop in first-quarter profit on Thursday amid a dramatic reversal in financial markets.
Wells Fargo reported a 7 percent fall in quarterly profit as the third-largest U.S. bank by assets set aside more money to cover bad loans, mainly to energy companies.
Citigroup is due to report earnings on Friday.
The S&P 500 advanced 2 points, or 0.15 percent, to 2,085, with with financials leading advancers and consumer staples the greatest laggard.
The Nasdaq composite traded 3 points higher, or 0.07 percent, at 4,950.
Decliners were a slight step a head of advancers on the New York Stock Exchange, with an exchange volume of 308 million and a composite volume of 1.4 billion in late-morning trade.
U.S. crude oil futures for May delivery gained 12 cents to $41.88 a barrel on the New York Mercantile Exchange.
Gold futures for June delivery fell $16.30 to $1,232 an ounce as of 11:41 a.m. ET.