U.S. stocks traded lower Thursday, with investors weighing mixed corporate earnings results from 3M Co., General Motors Company and Caterpillar Inc., as a strong U.S. dollar continues to drag on corporate profits during earnings season. Notable companies reporting quarterly results after the closing bell include technology giant Google Inc., software company Microsoft Corporation and online retailer Amazon.com Inc.
In morning trading, the Dow (INDEXDJX:.DJI) dropped 13.25 points, or 0.07 percent, to 18,025.02. The Standard & Poor's 500 (INDEXNASDAQ:.IXIC) dipped 1.66 points, or 0.08 percent, to 2,106.30. The Nasdaq composite (INDEXSP:.INX) fell 3.12 points, or 0.06 percent, to 5,032.05.
Shares of Dow component 3M Co. (NYSE:MMM) dropped 3.5 percent after the maker of Post-it notes and Scotch tape cut its earnings forecast for the year, due to a stronger U.S. dollar. The company reported first-quarter earnings of $1.85 per share, up from $1.79 a share a year ago, while revenue fell to $7.57 billion from $7.83 billion a year ago.
The robust dollar is a huge drag on growth for the benchmark S&P 500 because the index’s companies derive more than 40 percent of their revenue overseas. The U.S. dollar index, which measures the greenback against major world currencies, has gained around 13 percent since last June.
Meanwhile, shares of General Motors Company (NYSE:GM) dropped 3.2 percent after the auto manufacturer posted quarterly earnings and revenue that missed Wall Street expectations, driven by weak sales in Brazil and Russia.
PepsiCo Inc. (NYSE:PEP) dropped more than 1 percent Thursday, despite beating earnings estimates. However, the food and beverage company’s revenue dropped 3.2 percent to $12.22 billion in the first quarter, down from $12.62 billion a year earlier, due to a strong U.S. dollar.
However, Caterpillar Inc. (NYSE:CAT) turned in stronger-than-expected quarterly profit, despite lower sales. But the world's largest construction and mining equipment maker warned a strengthening U.S. dollar could weigh on its earnings results later this year. Toward noon, shares of the company were down about 1 percent.
The number of Americans filing new claims for unemployment benefits rose by 1,000 to 295,000 in the week ended April 18, the Labor Department said Thursday. Economists had expected jobless claims to fall 4,000 to 290,000 last week, according to analysts polled by Thomson Reuters.
Separately, U.S. home sales tumbled more than 11 percent in March, marking its biggest drop since July 2013. U.S. single-family home sales declined 11.4 percent to a seasonally adjusted annual rate of 481,000 units, the Commerce Department said Thursday.