U.S. stocks opened lower on Thursday as investors eyed a heavy day of earnings and some economic data.
“I think the market in the absence of anything is trading off techincals,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott. “The market I think is looking at the various technical levels and is looking at whether it is going to break up or break down. It seems to want to go higher but every time it reaches the 2,108 level it breaks down.”
On Wednesday, the Nasdaq closed up within 15 points of its all-time closing high of 5,048.62. The S&P 500 closed within 10 points of its closing high of 2,117.39.
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“We expect upside follow-through in the days ahead to allow the SPX to break out from its triangle formation to a new all-time high. So far, earnings season is driving more breakouts on the charts than breakdowns, so we think it is only a matter of time before this is reflected by the major indices,” Katie Stockton, chief technical strategist at BTIG, said in a note.
Among the slew of industrial earnings reports before the bell, Caterpillar surprised analysts by beating expectations on both earnings per share and revenue. CEO Doug Oberhelman said on CNBC’s “Squawk Box” that the United States was a bright spot in terms of construction growth. However, he said investors should not expect a repeat of this quarter. The firm raised its earnings forecast while maintaining its revenue outlook.
“I don’t extrapolate anything out of Caterpillar,” said Peter Boockvar, chief market analyst at The Lindsey Group, noting negative reports from other industrials. “Not one of them is going to drive the market. … It’s very much a mixed bag. The market is looking for direction and we may have to wait until next week’s Fed meeting.”
The Federal Reserve meets next Tuesday and Wednesday but will not hold a press conference.
3M reported earnings that missed expectations on both the top and bottom line. The company cited the impact of the strong dollar and cut its profit forecast for the year.
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General Motors delivered quarterly profit and revenue that missed expectations. Weaker volume in Brazil and Russia hurt sales, as well as the impact of weakening currencies in South America due to the strong U.S. dollar.
PepsiCo delivered quarterly earnings that topped analysts’ expectations. However, revenue fell 3.2 percent to $12.22 billion in the first quarter ended March 21, from $12.62 billion a year earlier, largely due to a strong dollar.
“Eventually, missing revenues and the increased warnings outlook from major companies, I think it eventually will affect stocks,” said Peter Cardillo, chief market economist at Rockwell Global Capital. He expects stocks to move lower.
Attention will also be on new home sales data for March, due at 10.00 a.m. ET, which looks likely to register a marked drop of around 5 percent month-on-month, following a 7.8 percent month-on-month jump in February that brought sales to a near-seven-year high of 539,000, according to Robert Kuenzel at Daiwa Capital Markets.
Weekly jobless claims showed an increase of 1,000 to 295,000.
The April installments of the Kansas City Fed’s manufacturing index and manufacturing PMI are also due Thursday.
Weakness in Europe could also weigh, after fresh data showed that business activity growth in the euro zone slowed in April, putting pressure on the region’s stocks.
Greek Prime Minister Alexis Tsipras will meet German Chancellor Angela Merkel in Brussels on Thursday, a day ahead of a crucial meeting of euro zone finance ministers in Latvia.
—CNBC’s Fred Imbert contributed to this report.
On tap this week:
Earnings: Amazon.com, Google, Microsoft, Starbucks, Altera, Capital One, E-Trade, Juniper Networks, Newmont Mining, Pandora
9:45 am: Manufacturing PMI
10:00 am: New home sales
Earnings: Biogen, AstraZeneca, American Airlines Group, Cabot Oil and Gas, State Street, Xerox, A.O. Smith, Tyco
8:30 am: Durable goods