Major indexes fell from the start of trading, following European markets sharply lower, with banks and industrial companies hit the hardest. Health care companies also fell.
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Financial markets were adjusting to the minutes of the Fed April meeting, released on Wednesday, in which the U.S. central bank opened the door to a rate hike in June, catching investors off guard. The S&P 500 gained 15.66 points, or 0.77 percent, to 2,055.7 and the Nasdaq Composite added 65.20 points, or 1.38 percent, to 4,777.73. The S&P 500 index rose 11 points, or 0.6 percent, to 2,051.
The comments came a day after the minutes of the Fed’s April meeting revealed that most policymakers felt a rate increase might be appropriate as early as next month.
“It has reasserted its ability to hike rates in June”, strategists at Brown Brothers Harriman said.
The suggestion that a rate increase in June is firmly on the table suggests the Fed is closer to tightening monetary policy again than Wall Street had expected. Those stocks have outperformed the market this year in part due to their reliable dividends, but higher rates on bonds would diminish the appeal of those stocks to investors seeking income.
Bond prices moved notably higher in early trading before moving roughly sideways for the remainder of the session.
RETAIL ROCKET: Wal-Mart Stores jumped 9 percent after reporting surprisingly strong sales and releasing an optimistic outlook.
Holding in SPDR Gold Trust (GLD), the world’s largest gold-backed exchange-traded fund, rose 0.52 percent to 860.34 tonnes on Thursday. The announcement came as the clothes retailer reported a 47 per cent drop in first-quarter profits and falling revenue.
Monsanto rose $3.42, or 3.5 percent, to $100.55 after German drug and chemicals company Bayer confirmed it has entered talks with the U.S.-based seed company.
The Dow Jones industrial average slipped 48 points, or 0.3 per cent, to 17,479. The Bloomberg Dollar Spot Index is set for a third weekly gain as bullion has dropped 1.4 percent this week, the most since the period to March 25.
Japan’s Nikkei 225 rose 0.5 percent while South Korea’s Kospi was flat.
India’s Mumbai Sensex index lost 1.19 percent, Taiwan’s TSEC index lost 0.78 percent, Hong Kong’s Hang Seng index lost 0.67 percent and Australia’s ASX index lost 0.64 percent.
Some policymakers at the April meeting expressed concern about a slowdown in USA economic growth during the first quarter, when gross domestic product expanded at an annual rate of 0.5 percent, a two-year low.
OIL: Benchmark U.S. oil fell 2 cents at $48.63 a barrel in NY and Brent, used to price worldwide oils, fell 18 cents to $48.63 a barrel in London.
A stronger dollar spurred investors to cash in on a second week of oil price gains, with the focus remaining on the market’s rebalancing as the global glut faced unplanned supply outages.
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Benchmark US 10-year notes fell 1/32 in price, pushing their yield up to 1.8506%.
