Dow S&P 500 trade under pressure Nasdaq struggles for slight gains

U.S. stock benchmarks traded lower on Thursday as Wall Street wrestled with further volatility, with traders contending with concerns about rising inflation and bond yields, against the backdrop of a relatively healthy domestic economy.

Strategists and traders have mostly pinned the recent selling in part to rising bond yields amid signs of inflation. But they have also noted that equities were due for a pullback after scoring big gains in January and throughout 2017.

What are the main benchmarks doing?

Dow Jones Industrial Average DJIA, -0.32% fell 141 points, or 0.6%, to 24,758. A slump in shares of Home Depot Inc. HD, -0.72% and Caterpillar Inc.CAT, -0.67% combined to exact a 36 point toll from the blue-chip benchmark. The S&P 500 index SPX, -0.10% traded 9 points, or 0.3%, lower at 2,672, weighed by declines of at least 0.7% in financial and industrials stocks.

The Nasdaq Composite Index COMP, +0.02% meanwhile, gave up 23 points, or about 0.3%, to 7,030, relinquishing a slightly higher open for the technology-laden gauge.

On Wednesday, the Dow closed 0.1% lower, the S&P 500 lost 0.9%, and the Nasdaq Composite shed 0.9%.

The three gauges are down between 2.5% and 2.9% for the week as of Wednesday’s close, after tumbling Monday, rallying Tuesday and suffering modest losses Wednesday. The Dow has cut its 12-month gain to 24%.

What are strategists saying?

“While yesterday’s moves were slightly more orderly, it appears to be far from clear that the recent increase in volatility has subsided,” said Michael Hewson, chief market analyst at CMC Markets UK, in a note.

What could help drive markets?

Political worries might pressure the market somewhat, as a partial shutdown of the federal government lies ahead if lawmakers don’t agree on spending measures by midnight.

Senate Majority Leader Mitch McConnell and Senate Minority Leader Chuck Schumer unveiled an agreement Wednesday. The deal faces a bumpy path in the House, where Republicans will need Democrats’ help to pass it, since conservatives will likely object to a big increase in government spending.

What’s on the economic docket?

Initial U.S. jobless claims fell by 9,000 to 221,000 in the seven days ended Feb 3. Economists surveyed by MarketWatch forecast a 235,000 reading.

Check out:MarketWatch’s Economic Calendar

The recent correction in financial markets is healthy and is unlikely to hurt financial conditions or the broader U.S. economy, Dallas Federal Reserve President Robert Kaplan said early Thursday at an event in Germany.

Three other Fed officials are scheduled to speak later. Philadelphia Fed President Patrick Harker was set to address the economic outlook and the impact for colleges at 8 a.m. Eastern in New York City, while Minneapolis Fed President Neel Kashkari will participate in a discussion at the chamber of commerce for Pierre, S.D., at 9 a.m. Eastern.

Kansas City Fed President Esther George is due to give a speech on the economic outlook to a business group in Wichita, Kan., at 9 p.m. Eastern.

Which stocks look like key movers?

Shares in Tesla Inc.TSLA, -1.85% traded nearly 0.6% higher. The maker of electric cars late Wednesday posted a narrower-than-expected adjusted loss for the fourth quarter.

See:Elon Musk predicts profit at Tesla in 2018, and much more

21st Century Fox Inc.FOXA, -0.36% shares traded flat after the media company reported better-than-anticipated earnings late Wednesday.

Shares of Twitter Inc.TWTR, +22.78% soared 26% trading Thursday after the microblogging company delivered better-than-expected financial results and reported its first-ever quarter of GAAP profitability.

Rice Krispies producer Kellogg Co.K, +2.30% reported fourth-quarter net income of $428.0 million, or $1.23 per share, compared with a loss of$53.0 million, or 15 cents per share, for the same period last year. Its shares were up 1.5%, in early action.

Yum Brands Inc.YUM, +0.60% and Grubhub Inc. GRUB, +27.75% said Thursday they have entered a partnership in the U.S. aimed at driving online sales and delivery to Yum’s restaurants, including KFC and Taco Bell. Meanwhile, Grubhub’s stock gained 29% after the company reported better-than-expected revenue. Shares of Yum were off by 0.5%.

Teva Pharmaceutical Industries Ltd. shares TEVA, -7.05%plummeted by about 13%Thursday after the company reported fourth-quarter profit and revenue beats but provided 2018 guidance that fell well short of expectations.

What are other assets doing?

European stocksSXXP, -0.48% moved down, with U.K. stocks UKX, -0.89%after the Bank of England held interest rates unchanged but said interest rates may go up sooner than previously expected. In its quarterly inflation report, the U.K. central bank lifted its 2018 economic growth forecast to 1.8% from 1.6%, saying U.K. trade is benefiting from a strong global upswing.

Asian markets mostly finished with gains.

The yield on 10-year Treasury notes TMUBMUSD10Y, +1.76% was at 2.86%, adding to gains from late Wednesday.

Gold futures GCG8, +0.26% edged slightly higher, as the metal tries to avoid its fifth straight decline as the dollar slips and as the 10-year yield rose. Meanwhile, crude-oil futures CLH8, -0.15% were lower, as the ICE U.S. Dollar Index DXY, -0.25% gained.

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