Dow falls greater than 100 factors as traders shake off robust earnings and financial knowledge

US stocks fell after a strong day of gains on Thursday as the market stuck in a trading range after a major rally earlier in the year.

The S&P 500 fell 0.3%, weighed down by energy and materials. The Dow Jones Industrial Average fell 150 points while the Nasdaq Composite was down 0.2%.

Southwest Airlines shares rose 0.8% after the airline announced that vacation bookings continued to rise and were expected to break even “or better” by June. Southwest also posted a less than expected loss in the first quarter.

Dow Inc. fell more than 4% even after the chemical company beat earnings and sales estimates for the first quarter. The stock is still up more than 10% through 2021.

The market stayed lower after weekly jobless claims read better than expected. The Department of Labor said Thursday that initial unemployment insurance claims totaled 547,000, down from the Dow Jones estimate of 603,000.

So far, companies have largely exceeded Wall Street’s expectations this earnings season, but strong first quarter results are not allowing the market to climb higher after record highs rose near multi-year highs.

“The string of strong positive EPS surprises is likely to continue, but the increased valuations are now ubiquitous. Sentiment is overly optimistic. A possible corporate tax change is an overhang,” said Maneesh Deshpande, head of equity derivatives strategy at Barclays in one Note.

Even so, the company raised its year-end S&P 500 target to 4,400, which would translate into a 6% profit from here. Barclays warned that another uptrend was unlikely.

American Airlines erased previous earnings and went negative even after the company announced that cash flow was positive at the end of the quarter with no debt payments.

Stocks rose on a two-day losing streak on Wednesday as companies tied to reopening the economy showed the way up. The Dow was up 316 points, or 0.93%, while the S&P 500 was up 0.93%. At 1.19%, the Nasdaq Composite was the relative outperformance of the major indices.

Small caps were a particular strength point during the session. The Russell 2000 finished the day 2.35% higher than its best day since March 1st.

The Dow and S&P 500 are less than 1% off regaining their record highs last Friday amid ongoing optimism about the pace of the economic recovery.

“Stocks continue to shoot almost all cylinders and remain in a strong position as the bull stretches across the cyclical, secular and increasingly defensive [sector] with an economy on the offensive, “stated strategists at Evercore ISI.” The sum of that coupled with soaring metals and materials, a Milquetoast dollar and a 10-year rate of 1.55% provides the technical definition of “goldilocks” as we consolidate the strong rally on key support, “the company said .

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