The Dow Jones Industrial Average finally ran out of steam Thursday as investors cashed in following an historic streak of 13 straight gains.
The 30-stock index fell 237.40 points, or by 0.67%, to 35,282.72 — dragged lower by shares of Honeywell. A pop in the 10-year Treasury yield back above 4% didn’t help sentiment either. If it had gained a 14th day on Thursday, the index would have tied its record winning streak going way back to 1897.
The S&P 500 was lower by 0.64% to 4,537.41. At one point during the day, the broader index topped the key 4,600 level for the first time since March 2022. Meanwhile, the Nasdaq Composite slid 0.55% to 14,050.11 as investors took some profits in key tech shares like Microsoft and Apple.
The Dow’s winning streak was driven by signs that the economy will dodge a recession, falling inflation data and resilient corporate earnings. Wall Street got more evidence on all those fronts on Thursday.
Meta Platforms shares popped 4.4% on better-than-expected results and strong guidance. The company’s numbers were boosted by a rebound in ad revenue. And the latest gross domestic product reading Thursday showed a rise of 2.4% in the second quarter, which was better than the 2% increase expected by economists polled by Dow Jones.
The GDP report also suggested price pressures are easing, with the personal consumption expenditures price index rising 2.6% in the second quarter. That’s lower than the 3.2% increase expected by economists, and the 4.1% rise in the prior quarter.
The Dow kept going higher this week even as the Federal Reserve hiked rates to the highest in 22 years on Wednesday. Investors took the rate hike in stride as Fed Chair Jerome Powell said after the decision that the central bank could raise rates again or hold them steady at these levels depending on the data. The central bank meets again in September and traders are betting that upcoming data will cause the Fed to back off.
“Those very high rates that scared me and the market earlier on in the year don’t seem to be having as much of a negative effect as I had feared,” Wharton School’s Jeremy Siegel said on CNBC’s “Squawk Box” on Thursday. “And that, combined with the fact that Powell now is saying ‘I’m going to look at both sides of the equation,’ I think is very positive for the markets.”
But the momentum finally ran out on Thursday. Dow-member Honeywell fell more than 5% after bucking the trend of better-than-expected quarterly results with lighter revenue than the Street wanted.
The Dow’s 13 straight days of gains is its best winning streak going back to 1987. Thursday could have been quite historic, tying a streak not seen since 126 years ago when Queen Victoria still sat on the throne and a year after the Dow was created. Back then, the Dow listed just 12 stocks; it expanded to 30 stocks in 1928.
The major averages closed lower Thursday, with a historic 13-day rally for the Dow Jones Industrial Average coming to an end. The 30-stock index fell 237.40 points, or by 0.67%, to 35,282.72.
The S&P 500 was lower by 0.64% to 4,537.41. At one point during the day, the broader index topped the key 4,600 level for the first time since March 2022.
Meanwhile, the Nasdaq Composite slid 0.55% to 14,050.11.
