The S&P 500 and Nasdaq Composite logged modest gains Thursday as advances in Apple Inc. and Facebook Inc. shares, following better-than-expected quarterly results, helped to offset losses in telecom and energy stocks.
Still, the three main stock-market indexes remained stuck in a relatively narrow trading range, with the S&P 500 moving in a 13-point band all session.
“Major indices remain in consolidation phases with no clear directional bias on a day-to-day basis,” said Katie Stockton, chief technical strategist at BTIG, in a note.
The S&P 500 index SPX, +0.16% rose 3.48 points, or 0.2%, to close at 2,170.06. A sixth straight decline for oil futures CLU6, -1.96% weighed on energy, off 0.2%. Telecom stocks finished 0.7% lower led by a 3.3% loss in Level 3 Communications LVLT, -3.34%
The Dow Jones Industrial Average DJIA, -0.09% fell for a fourth-straight session, shedding 15.82 points, or 0.1%, to finish at 18,456.35, hamstrung by sharp losses in Boeing Co. BA, -2.17% and Caterpillar Inc. CAT, -1.40%
The tech-heavy Nasdaq Composite Index COMP, +0.30% climbed 15.17 points, or 0.3%, to end at 5,154.98, boosted by a 1.4% gain in Apple Inc. AAPL, +1.35% Upbeat results from Facebook Inc. FB, +1.35% also supported the Nasdaq after the company late Wednesday beat Wall Street expectations. The Nasdaq is off 1.2% from its record close, which was set July 20, 2015.
Tempering enthusiasm for Facebook somewhat, the Menlo Park, Calif. company’s chief financial officer, Dave Wehner, said he expects lower ad-revenue growth in the next two quarters and just modest growth in its ad load. Still, shares of Facebook finished up 1.4% and surpassed the market capitalization of Berkshire Hathaway BRK.B, +0.16%
Stocks’ muted moves come a day after the Federal Reserve on Wednesday decided to leave interest rates unchanged but hinted at a possible rate rise as soon as September. The central bank said near-term risks to the economic outlook have diminished.
“The stock market is facing a reality check this week,” said Kristina Hooper, U.S. investment strategist for Allianz Global Investors.
“Post-Brexit euphoria that drove up stocks was not based on fundamentals, but on the assumption that monetary policy would remain extremely accommodative. Now that it seems clear that September is very much a live meeting for the Fed, investors seem to be a bit more hesitant,” she said.
The potential increase in rates weighed on telecom, the market’s big winner this year, up 20% year to date.
“Telecom and utilities have been the place where fixed-income investors have gone to hide,” while government-bond yields recently tumbled to all-time lows,” said Kim Forrest, senior portfolio manager at Fort Pitt Capital. Now that “a September rate hike is on the table, though December is more probable,” she said defensive stocks are taking a hit.
More broadly, with equity valuations at historical highs and earnings reports coming in mixed, “all the market wants to know is whether the earnings recession is ending,” said Quincy Krosby, market strategist at Prudential Financial, pointing to the main benchmarks’ inability to push reach new records over the last few sessions.
But others said it is a good sign that the market hasn’t imploded after a run that sent the S&P 500 and the Dow to all-time highs.
“Simply seeing the range remain intact has been a constructive phenomenon: the longer the [S&P] moves sideways after an almost 10% move, the greater the odds that another up leg results,” said Frank Cappelleri, technical analyst at Instinet, in an email.
On the economic front, the number of people who applied for unemployment benefits last week rose from historical lows, while the nation’s trade gap widened in June to $63.3 billion, as imports rose faster than exports. Meanwhile, wholesale inventories were unchanged and retail inventories inched higher.
Facebook posts strong profit, revenue growth
The social networking company has again reported growing profit on the strength of its mobile advertising business.
Shares of MasterCard Inc. MA, +2.41% climbed 2.4%, after the payments-processing company beat second-quarter profit and revenue expectations.
GoPro Inc. GPRO, +12.53% swung to a loss, but results still beat expectations, and shares jumped nearly 13%. Groupon Inc. GRPN, +28.84% soared 29% after posting better-than-expected results late on Wednesday.
Other markets: The Nikkei 225 index NIK, -1.13% slipped 1.1% as investors remained cautious about a potential stimulus plan. The Bank of Japan will wrap up its policy meeting Friday, and some investors expect it to join forces with the government to announce a big batch of stimulus measures.
Gold prices GCQ6, +0.44% settled higher as investors took the view that the Fed won’t raise interest rates as early as September.
—Barbara Kollmeyer and Sara Sjolin contributed to this article.