Stocks retreat as U.S.-China tensions rise

Investors took the opportunity Thursday to catch their breath with stocks at two-month highs and the Nasdaq just five percent below the record high set before the pandemic hit.

Wall Street also had to cope with rising geopolitical tensions between the U.S. and China.

The Dow, the S&P 500 and the Nasdaq were all down modestly for the day.

The market hasn't been able to put together two-days of back-to-back gains all week. A possible sign of trouble says Thomson Reuters Stocks Buzz analyst Terence Gabriel.

"So now it remains to be seen if we're going to take out the top end of this zone or are we going to run out of steam and turn heavy and fall below the lower boundary. So that's what traders are sort of focused on here and we are looking at some signs that suggest the market actually may be a bit frothy here and therefore vulnerable."

Jobless claims remain elevated, which delivered a reminder of the tough road that's still ahead for the U.S. economy. 2.4 million more Americans filed for new unemployment benefits last week, bringing the total since March to nearly 40 million.

And things look bleak for the housing market. Home resales saw their biggest drop in nearly 10 years.

The retail earnings roll-out continued Thursday.

Sales and profits dropped less-than-expected at Best Buy as the electronics chain closed stores to foot traffic. It did however offer curb-side pickup for online sales, which surged 155 percent. Best Buy says it is ramping up same-delivery services, which will put a dent in future earnings.

And Macy's warned it could get slammed with a $1.1 billion quarterly loss. It started reopening stores at the beginning of May and expects to reopen most locations by late June.

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