Investing.com – U.S. stocks retreated from record highs weighed by a slump in financials as better-than-expected earnings from JP Morgan and Citigroup did little to lift sentiment on equities.
U.S. stocks started the session on the back foot as investors mulled over earnings reports from JP Morgan and Citigroup that beat on both the top on bottom lines.
On the economic data front, labor market and wholesale inflation data topped expectations pointing to underlying strength in the U.S. economy.
The U.S. Department of Labor reported Thursday that initial jobless claims fell 15,000 to a seasonally adjusted 258,000 for the week ended Oct. 7, beating forecasts of a 7,000 decline.
In a separate report, the U.S. Department of Labor said its producer price index for final demand increased 0.4% in September. In the 12 months through September, the PPI rose 2.2% after rising 2% in August.
Analysts have been quick to downplay the slump in U.S. stocks, insisting the recent upward trend in markets is not at risk of reversing as earnings will reflect strong fundamentals.
“Basic fundamentals are good, companies are making money, and I think the market will be relatively strong throughout earnings season, but I don’t see a huge spike up between now and the end of the year because a lot [of earnings optimism] has been priced in,” said Gary Droz, managing director at MainLine Private Wealth.
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