Although major indexes came off intraday lows, the Dow Jones Industrial Average was still down over 190 points, after being off over 600 points earlier in the session. Earnings from major U.S. banks, including JPMorgan and Morgan Stanley disappointed Wall Street early Thursday.
Investors digested earnings news from Dow Jones leader JPMorgan early Thursday, which showed a wider-than-expected drop in second-quarter profit of 28%, attributing the decline to a $1.1 billion in provision for credit losses amid concerns over a possible economic downturn.
JPMorgan stock led the downside among Dow Jones stocks with a 4% drop while blue chip Goldman Sachs sold off in sympathy over 3.3%. Travelers also led the downside among Dow stocks on Thursday. Elsewhere, Morgan Stanley pared earlier losses to a drop of 0.2% on Thursday, after missing Q2 sales and earnings estimates.
Dow Jones Today
In late afternoon trading, the Dow Jones industrials was down 1.1% after trading lower earlier in the session. The S&P 500 also erased early losses but still declined 1%. Meanwhile, the Nasdaq pared losses to near break-even as tech stocks outperformed.
Small caps fared the worst, with the Russell 2000 down 1.7%. Volume was lower on the Nasdaq and higher on the NYSE vs. the same time on Wednesday. Technology stocks led the upside among the S&P 500 sectors, while energy and materials lagged. The Energy Select Sector SPDR was down 2.9% and gapped down below its 200-day line. U.S. crude oil prices were down 1.4% to below $95 a barrel on Thursday.
Month-over-month producer prices for June came in worse than expected, showing a 1.1% jump. Analysts expected a 0.8% increase. This, combined with yesterday's disappointing consumer price index, has investors on edge amid a rising possibility of a 100-basis-point rate hike in July.
In other economic news, U.S. retail sales are expected to be released by the U.S. Census Bureau early Friday, with consensus for a 0.8% increase. Retail sales can clue investors in on the pace of consumer spending and potential impacts on GDP.
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Health Care Stocks Lead IBD 50
Over in the growth-focused IBD 50 Index, health care stocks outperformed, with strong moves higher from AMN Resources, Privia Health Group and Cross Country Healthcare. These health care plays rose 6.4%, 3.8% and 2.7%, respectively.
Dow Jones leader UnitedHealth is scheduled to report earnings Friday before the market opens. Analysts expect the firm to show earnings of $5.20 per-share on revenue of $79.68 billion for the second quarter. UnitedHealth is a recent breakout stock among managed care firms. The stock has since slipped below a recent 507.35 double-bottom entry but shares gained support at the 50-day moving average.
Other recent breakouts from the managed care group include Humana and Centene. The managed care industry group ranks No. 14 out of IBD's 197 groups.
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
