US stocks finished stronger on Thursday, snapping a two-day losing streak amid some ugly second-quarter earnings.
Stocks opened lower but retraced some of their losses as the day went on. While the S&P 500 and the Nasdaq Composite finished squarely in the green, the Dow only just eked out a gain.
The Dow closed just 3 points higher. The S&P 500 and the Nasdaq Composite finished 0.4% and 0.3% higher.
Comments from New York Federal Reserve President John Williams, who said he favored taking preventative measures at the first signs of an economic slowdown, were interpreted as another sign of interest rate cuts on the horizon.
Earlier, “sentiment has turned negative towards stocks amid concerns that this earnings season could be a weak one, especially for technology companies whose valuations are still sky-high,” wrote Fawad Razaqzada, technical analyst at Forex.com.
Netflix, for example, reported earnings after Wednesday’s close, including a massive miss on subscriber growth. Its shares closed more than 10% lower, marking its worst day in three years. The streaming business added 2.7 million new users in the second quarter, compared with a forecast of 5 million.
Aside from earnings, investors are weighing worries about the health of the economy against the anticipated growth-boosting interest rate cut by the Federal Reserve, expected in for the end of this month.
“But unless growth starts to pick up, central banks’ actions will only help to delay the inevitable: a sizeable correction,” Razaqzada said.
Strong dollar policy
In the world of currencies, comments from Treasury Secretary Steven Mnuchin were in focus.
At the G7 finance ministers meeting in Chantilly, France, Mnuchin said that the United States’ dollar policy wouldn’t change for now, which had market participants wondering whether currency intervention is on the horizon.
“The US is keeping its options opened for a possible currency intervention, as it always [has],” said Sebastien Galy, senior macro strategist at Nordea Asset Management.
“This is a potent threat to the BOJ and ECB to stop them from choosing more negative interest rates,” he added.
The US dollar, measured by the ICE US Dollar Index, was down 0.5% at 96.701.