U.S. stock indexes pulled back from their record highs Thursday after an afternoon swoon for technology companies helped overshadow another big day for telecoms.
The Standard & Poor's 500 index fell 2.41 points, or 0.1%, from the record it had set Wednesday, closing at 2,475.42. The Nasdaq composite likewise fell from a record, down 40.56 points, or 0.6%, to 6,382.19. The Dow Jones industrial average was an exception; it rose 85.54 points, or 0.4%, to 21,796.55, a new all-time high.
Stocks had been on track for another quiet day of gains in a year full of them, but Apple, Microsoft and other tech stocks suddenly changed direction in the afternoon. After being up as much as 0.6% in morning trading, tech stocks in the S&P 500 finished the day down 0.8%. It was the worst performance among the 11 sectors that make up the index.
Software company CA had the biggest loss in the S&P 500, falling 10.2% to $31.10. It began to plunge around noon, after reports that merger talks between it and BMC Software have ended.
F5 Networks was another tech stock that helped lead the S&P 500 lower. It fell 7.2% to $119.02 after it reported weaker revenue for the latest quarter than analysts expected and gave a forecast for earnings this quarter that fell short of some analysts' forecasts.
About half the companies in the S&P 500 have reported their earnings for the latest quarter, and the results have been mostly encouraging. For many companies, not only are profits growing, but so are revenues.
Expectations were high coming into the reporting season, and shares rallied accordingly. Now, companies' stocks are getting less of a boost than usual when the firms report earnings that beat analysts' forecasts, said Nate Thooft, senior portfolio manager at Manulife Asset Management.
"And for those few that are disappointing, they're getting penalized significantly," Thooft said. Stock prices are dropping more than usual when companies fall short of expectations, he said.
Twitter dived 14.1% to $16.84. It reported better-than-expected quarterly results but said its monthly average user base did not grow from the prior quarter.
Healthcare stocks were weak. AstraZeneca's U.S.-listed shares sank 14.9% to $28.88 after the drugmaker said its lung cancer drug Imfinzi did not reach its goals in a clinical trial.
Industrial companies also struggled. Johnson Controls tumbled 7.3% to $40.14 after it reported weaker-than-expected revenue for the latest quarter and trimmed the upper end of the range for its forecast for full-year earnings per share.
On the opposite side were telecom stocks, which rallied for a second straight day. Verizon Communications jumped 7.7% to $47.81 — its best day in more than eight years — after it reported more revenue than analysts expected. Many more customers bought wireless phones than Wall Street forecast.
Verizon's big day follows AT&T's, which had its biggest move since 2009 on Wednesday after it reported stronger-than-expected earnings. Over the last two days, AT&T has climbed 8.8%, and Verizon is up 8.7%.
Facebook rose 2.9% to $170.44 after it reported stronger-than-expected earnings. Its advertising revenue rose by nearly half from a year earlier, and Wall Street was pleased with its spending forecasts.
Oil and gas prices rose, which helped energy stocks in the S&P 500 advance 1%. The price of oil has been on a strong run this week, hitting its highest level since May, and benchmark U.S. crude rose 29 cents to settle at $49.04 a barrel Thursday. Brent crude, the international standard, rose 52 cents to $51.49 a barrel.
Natural gas rose 5 cents to $2.97 per 1,000 cubic feet. Heating oil rose nearly 1 cent to $1.60 a gallon. Wholesale gasoline rose 3 cents to $1.64 a gallon.
Gold rose $10.60 to $1,260.00 an ounce. Silver rose 11 cents to $16.57 an ounce. Copper rose nearly 1 cent to $2.88 a pound.
The yield on the 10-year Treasury rose to 2.32% from 2.28%. The two-year yield inched up to 1.36% from 1.35%, and the 30-year yield climbed to 2.94% from 2.89%.
The dollar fell to 111.09 yen from 111.30 yen. The euro fell to $1.1681 from $1.1725. The British pound fell to $1.3070 from $1.3100.
In overseas markets, France's CAC 40 and the FTSE 100 in London each slipped 0.1%. Germany's DAX fell 0.8%. The Japanese Nikkei 225 index edged up 0.1%. Hong Kong's Hang Seng climbed 0.7%, and the Kospi in South Korea added 0.4%.
2:25 p.m.: This article was updated with closing prices and context.