Stocks closed lower Thursday, after a sharp fall in oil prices, while investors parsed through key U.S. economic data, and digested a key European Central Bank decision on interest rates.
"You've got a back-and-forth with the data. One month you get strong economic data, and then another month it's weak," said Bruce McCain, chief investment strategist at Key Private Bank. "There's just no clear path [for the stock market]."
"We're playing the waiting game right now and stocks are kind of dragging along," said John Caruso, senior market strategist at RJO Futures.
The Dow Jones industrial average closed about 40 points lower, with Travelers Companies contributing the most losses. The S&P 500 held 0.14 percent lower as telecommunications fell approximately 2 percent. The Nasdaq composite slipped 0.1 percent. The three major indexes alternated between gains and losses throughout the session.
S&P 500 intraday chart
U.S. crude futures for November delivery fell 2.27 percent to settle at $50.43 per barrel, a day after hitting a 15-month high, as traders took profits off the table following the previous day's rally on another unseasonal draw in U.S. crude oil stocks.
"We think we're in a trading range of $40-to-$60 per barrel. We don't really see a catalyst for oil to go much higher," said Jon Adams, senior investment strategist at BMO Global Asset Management.
In U.S. economic news, existing home sales rose 3.2 percent last month to a seasonably adjusted rate of 5.47 million, their highest since June. Leading indicators for September, meanwhile rose 0.2 percent.
Meanwhile, weekly jobless claims rose by 13,000 to 260,000, but notched their 85th straight week coming in below 300,000, the longest period since 1970. Meanwhile, the Philadelphia Federal Reserve Business Index for October came in at 9.7, below September's 12.8.
Investors also turned their eyes toward Europe, as the ECB kept interest rates unchanged, as was widely expected. Facing high unemployment, weak growth and ultra low inflation, the ECB has provided extraordinary stimulus in recent years, cutting interest rates deep into negative territory and pushing the cost of credit to all-time lows, hoping to jump start growth.
"There is a question as to whether the ECB is, not just going to extend [quantitative easing], but also which direction they're going to go on," said Quincy Krosby, market strategist at Prudential Financial. "What assets are they going to buy? Remember, it's a much more shallow market for QE there than it is here."
ECB President Mario Draghi said that, while extending the central bank's current QE program beyond its March 2017 deadline was not discussed at this meeting, he did say the central bank will preserve very substantial amount of monetary policy support.
The dollar whipsawed against a basket of currencies, last trading 0.37 percent higher. The euro fell 0.42 percent to $1.091 while the dropped 0.55 percent to 103.95.
U.S. Treasurys also moved in a range, with the benchmark 10-year yield rising above 1.76 percent and later falling to around 1.72 percent, before holding around 1.75 percent. The two-year note yield held higher at 0.82 percent. "What this tells you is we didn't get too much new information. The phrase most heard during the news conference was 'we did not discuss,'" said James Athey, fixed income investment manager at Aberdeen Asset Management.
Peter Cardillo, chief market economist at First Standard Financial, said "the bond market has basically priced in a 25 percent move from the Fed by the end of the year." New York Fed President William Dudley reiterated remarks made last week, saying the Fed will likely raise rates this year, so long as the economic data remains strong.
In corporate news, earnings season carried on, as Dow components Travelers and Verizon both posted quarterly results. Travelers beat estimates on both earnings and revenues, while Verizon missed on revenue while beating on profits.
American Express reported better-than-expected results, sending its shares more than 10 percent higher, before closing up 9.03 percent. That said, eBay shares dropped 10.76 percent, despite beating Street estimates, after lowering its earnings guidance for the fourth quarter.
As of 9 a.m. ET Thursday, 79 percent of the 99 S&P 500 components that had reported beat Wall Street consensus estimates on earnings, while 63 percent exceeded expectations on revenues, according to data from The Earnings Scout.
"If things remain the way they are, this could be the pivot point; this earnings recession will be over," said Art Hogan, chief market strategist at Wunderlich Securities.
"Earnings is going to be one of the main factors as we head into the end of the year and the into 2017," said Casey Clark, vice president of investment strategy at Glenmede. "What we're looking for is for more top-line growth."
Major U.S. Indexes
The Dow Jones industrial average fell 40.27 points, or 0.22 percent, to close at 18,162.35, with Travelers leading decliners and American Express the top advancer.
The fell 2.95 point, or 0.14 percent, to end at 2,141.34, with telecommunications leading 10 sectors lower and health care as the only riser.
The Nasdaq slipped 4.58 points, or 0.09 percent, to close at 5,241.83.
About four stocks declined for every three advancers at the New York Stock Exchange, with an exchange volume of 777.14 million and a composite volume of 3.267 billion at the close.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded lower near 13.9.
Gold futures for December delivery fell $2.40 to settle at $1,267.50 per ounce.
—Reuters contributed to this report.
On tap this week:
Thursday
Earnings: Microsoft, Verizon, Travelers, Union Pacific, Bank of NY Mellon, Walgreens Boots Alliance, Illinois Tool Works, E*Trade, Dunkin Brands,American Airlines, Alaska Airlines, Pulte Group, Fifth Third, KLA-Tencor, Advanced Micro
4:45 p.m. New York Fed's Dudley closing comments at workshop on financial services
Friday
Earnings: Daimler, General Electric, Honeywell, McDonald's,Manpower
10:15 a.m. Fed Gov. Daniel Tarullo
2:30 p.m. San Francisco Fed's Williams