The Dow Jones industrial average crossed the 40,000 level on Thursday for the first time and a world stock index scored a third straight record intraday high on hopes of U.S. interest rate cuts and strong earnings before stocks turned mostly flat in afternoon trading.
Data on Wednesday showed cooling consumer price inflation, although that was offset on Thursday by news that U.S. jobless claims fell in the latest week and by figures showing U.S. import prices increased 0.9% last month.
That data boosted U.S. Treasury yields and the dollar.
The Dow rose as high as 40,051.05 while the S&P 500 and Nasdaq also hit record highs in early New York trading before slowly losing steam and finishing slightly lower on the session.
Shares of Walmart jumped 7% for its biggest one-day percentage gain since March 2020 after the retail giant raised its fiscal 2025 sales and profit forecast.
The Dow Jones Industrial Average fell 38.62 points, or 0.10%, to 39,869.38, the S&P 500 lost 11.03 points, or 0.21%, at 5,297.12 and the Nasdaq Composite fell 44.07 points, or 0.26%, to 16,698.32.
"What (the Dow hitting 40,000) means is that regardless of the concerns about inflation and consumer sentiment, the companies in the Dow, which represent a cross section of our economy, continue to march higher on better earnings and stronger guidance," said Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina.
MSCI's gauge of stocks across the world rose 0.31 points, or 0.04%, to 794.08, hitting a third straight record intraday high. The STOXX 600 index fell 0.21%.
Overnight in Asia, Chinese and Hong Kong property shares had also rallied after reports that China was considering a plan for local governments to buy up millions of unsold homes across the country. [.SS]
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, gained 0.29% to 104.50, with the euro down 0.16% at $1.0865. Against the Japanese yen, the dollar strengthened 0.34% at 155.39.
Data on Thursday showed the number of Americans filing new claims for unemployment benefits fell 10,000 to a seasonally adjusted 222,000 in the latest week, indicating a still-strong labor market.
U.S. Treasury yields rebounded from almost six-week lows after the jobless claims data and as Federal Reserve officials said they need to see further progress on inflation before cutting interest rates.
New York Fed President John Williams said the data is not enough to call for the U.S. central bank to cut interest rates sometime soon.
Richmond Fed President Thomas Barkin also said inflation is still not where the Fed needs it to be, while Cleveland Fed President Loretta Mester said holding the central bank's policy at current levels will help get still-high inflation back to the 2% target.
Benchmark 10-year yields were last up 2.3 basis points (bps) at 4.38% after falling to 4.313%, the lowest since April 5. They are now trading back above the 200-day moving average of 4.331%, after briefly trading below it.
U.S. crude gained 60 cents to settle at $79.23 a barrel and Brent rose 52 cents to settle at $83.27.
Spot gold fell 0.1% to $2,383.22 per ounce as of 1645 GMT, after hitting its highest since April 19 earlier in the session. Bullion rose more than 1% on Wednesday.
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