NEW YORK, May 16 (Xinhua) -- U.S. stocks ended lower on Thursday, after all three indexes set records earlier in the day amid revived hopes that the Federal Reserve will cut its main interest rate this year.
The Dow Jones Industrial Average fell by 38.62 points, or 0.10 percent, to 39,869.38, after briefly jumping above 40,000 for the first time. The S&P 500 sank 11.05 points, or 0.21 percent, to 5,297.1. The Nasdaq Composite Index shed 44.07 points, or 0.26 percent, to 16,698.32.
Ten of the 11 primary S&P 500 sectors ended in red, with consumer discretionary and materials leading the laggards by losing 0.75 percent and 0.73 percent, respectively. Meanwhile, consumer staples bucked the trend by rising 1.48 percent.
Federal Reserve Bank of Cleveland President Loretta Mester stated on Thursday that maintaining the current policy levels will assist in bringing the persistently high inflation back to the 2 percent target. "Monetary policy is well positioned for risk management as we gather more evidence on how the economy is evolving. The most likely scenario for the overall economy and that of the region is that the current restrictive stance of monetary policy will continue to help moderate growth and labor market conditions and that this moderation will contribute to the further easing of price pressures," Mester said.
She added, "I expect progress on inflation over time, but at a slower pace than we saw last year."
On the economic front, initial jobless claims remained strong, with a headline total of 222,000, slightly above estimates but down 10,000 from the previous week's upward revision to 232,000. Continuing claims rose slightly to 1.794 million from the prior week's slightly downwardly adjusted 1.781 million.
Housing starts for April, however, presented a different picture. The headline figure of 1.36 million was below the anticipated 1.40 million, though it was up from the previous month's significant downward revision from 1.32 million to 1.29 million. Building permits, a proxy for future housing starts, showed a headline figure of 1.440 million, falling below expectations and the previous month's figures, representing the lowest reading in a year.
Walmart jumped 6 percent on strong fiscal first-quarter results, which is now up 26 percent for the year. However, shares of companies favored by retail traders and being called "meme stocks," such as GameStop, AMC Entertainment and BlackBerry, plummeted on Thursday. GameStop, after soaring more than 130 percent earlier in the week, plunged 30 percent to 27.67 U.S. dollars, while AMC, the theater chain, dropped 15.33 percent.
"People are only buying because they believe more people will come in and buy after them, so they can sell at a higher price to those new buyers," noted Cory Mitchell, an analyst with Trading.biz, in an email. "The stock may go higher in the short-term, but unless the company has a massive turnaround whatever rally develops will be followed by swift and severe selling."
