U.S. stocks traded in a narrow range Thursday, struggling for a third-straight day of gains, with oil trying to hold the psychologically key $50 level after earlier topping it for the first time since October.
“I think the market … is pausing to digest Tuesday’s and Wednesday’s rally,” said Adam Sarhan , CEO of Sarhan Capital, adding investors are setting the stage for Friday’s GDP data and Fed Chair Janet Yellen’s speech.
WTI and Brent held near the flatline in afternoon trade after briefly dipping lower. Earlier, WTI topped $50 a barrel to hit its highest in intraday trade since early October.
“I think the fact oil was up over $50 and now in the low $49s is just (causing) a little bit of weakness. But that’s all noise,” said James Meyer, chief investment officer at Tower Bridge Advisors. He said stocks were pausing amid lack of major news as the major averages held near recent highs.
The S&P 500 and Dow Jones industrial average traded about 2 percent below their 52-week intraday highs, while the Nasdaq composite was more than 6 percent below its 52-week intraday high.
Katie Stockton, chief technical strategist at BTIG, said in a morning note that S&P futures were in short-term overbought territory.
“Overbought conditions can likely be sustained for 3-4 days before giving way to a pullback, but this would not be enough time for a breakout from the long-term downtrend channel to be confirmed,” she said. “We are watching for the VIX to push out of its trading range as an indication of increased downside volatility for equities.”
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded lower near 13.8.
All three major averages gave up opening gains to hold mostly lower in afternoon trade. Materials and financials were the greatest S&P laggards, while Microsoft and Apple traded lower.
Goldman Sachs had the greatest negative impact on the Dow Jones industrial average in afternoon trade.
The U.S. dollar index pared earlier losses to trade about 0.1 percent. Commodity-related currencies were stronger against the dollar. The euro was near $1.117 and the yen traded near 109.8 yen against the greenback as of 1:08 p.m. ET.
U.S. stock index futures held slightly higher after early morning data reports.
Durable goods orders jumped 3.4 percent last month, the Commerce Department said. However, non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, fell 0.8 percent for a third-straight month after an upwardly revised 0.1 percent drop the prior month.
Initial jobless claims fell to a seasonally adjusted 268,000 for the week ended May 21.
Pending home sales rose 5.1 percent in April from the previous month to hit their highest level in a decade.
Federal Reserve Governor Jerome Powell, a voting member, said in a speech that an interest rate hike could be appropriate fairly soon, adding that he supports gradual hikes if data underpin forecasts of an improving economy. Fed Chair Yellen is due to speak Friday afternoon as she receives an award at Harvard.
Treasury yields held lower, with the 2-year yield around 0.89 percent and the 10-year yield around 1.84 percent in afternoon trade.
The Treasury held a seven-year note auction, which saw strong demand.
St. Louis Federal Reserve President James Bullard said Thursday in a speech in Singapore that U.S. labor markets are relatively tight and may put upward pressure on inflation.
He noted while market-based forecasts of Fed policy see “almost no normalization,” the committee expects “data-dependent ‘slow-normalization.'”
European stocks were closed slightly higher, with the pan-European STOXX 600 index gaining 0.1 percent. Asian stocks closed mostly higher, with the Nikkei 225 up about 0.1 percent and the Shanghai compsite about 0.3 percent higher.
In afternoon trade, the Dow Jones industrial average fell 41 points, or 0.23 percent, to 17,810, with DuPont leading decliners and Verizon the greatest advancer.
The S&P 500 fell 2 points, or 0.11 percent, to 2,088, with materials leading six sectors lower and telecommunications leading advancers.
The Nasdaq composite dropped 1 point, or 0.04 percent, to 4,893.
Advancers and decliners were about even on the New York Stock Exchange, with an exchange volume of 399 million and a composite volume of 1.75 billion in afternook trade.
U.S. crude oil futures for July delivery gained 9 cents to $49.66 a barrel on the New York Mercantile Exchange.
Gold futures for June delivery fell $3.20 to $1,220.60 an ounce as of 1:12 p.m. ET.
—Reuters contributed to this report.
On tap this week:
Earnings: Palo Alto Networks, GameStop, Splunk
Earnings: JA Solar
8:30 a.m. Real GDP Q1 (second)
10 a.m. Consumer sentiment
1:15 p.m. Fed Chair Janet Yellen receives award, in Q&A at Harvard
*Planner subject to change.