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Walmart ( WMT ) rises on annual forecast raise

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Deere falls on annual forecast cut

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US weekly jobless claims fall

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Indexes down: Dow 0.10%, S&P 0.21%, Nasdaq 0.26%

(Adds analyst comment, market details)

By Chibuike Oguh and Bansari Mayur Kamdar

NEW YORK, May 16 (Reuters) - U.S. stocks closed lower on

Thursday after the Dow reached an intra-day high of

40,000 for the first time, as investors continued to recalibrate

their rate-cut expectations following data showing a slowdown in

inflation, as well as strong corporate earnings results.

Early gains in equities dissipated throughout the day,

however, with the three major indexes closing slightly lower.

The blue-chip index has recovered from its October 2022

lows, powered by resilient U.S. economic growth despite steep

rate hikes by the Fed.

Ten out of 11 S&P 500 sectors closed lower, with stocks in

consumer staples the only top gainer.

"We've had a big rally and people are looking at multiples,

saying 'we've got great earnings growth this year and next year

but it's still priced in at 21 or 22 times forward earnings,'"

said Thomas Hayes, chairman of Great Hill Capital in New York.

"We have a lot of good news and a lot of that is priced in

and that's what the market is grappling with right now," Hayes

added.

Investors are betting on two quarter-point interest rate

cuts from the Federal Reserve this year, and estimate a 70%

chance of the first reduction in September, according to the CME

FedWatch Tool.

All three Wall Street indexes had reached record closes on

Wednesday after data showed a smaller-than-expected rise in

consumer prices in April, indicating that inflation had resumed

its downward trend.

Data on Thursday also showed the number of Americans filing

new claims for jobless benefits fell last week, though labor

market conditions remain fairly tight even as job growth is

cooling.

"The current environment seems to focused on what the Fed

may or may not do, given that we had started the year with the

expectation that the Fed will cut rates up to six times but that

moved down more recently to one or two times," said Silas Myers,

chief executive and portfolio manager at Mar Vista Investment

Partners in Los Angeles.

The Dow Jones Industrial Average fell 38.62 points,

or 0.10%, to 39,869.38, the S&P 500 lost 11.05 points, or

0.21%, to 5,297.10 and the Nasdaq Composite lost 44.07

points, or 0.26%, to 16,698.32.

Walmart ( WMT ) rose 7% after the retail giant raised its

fiscal 2025 sales and profit forecast, betting on easing

inflation to further boost demand for essentials.

Deere dropped 4.8% after the farm equipment maker

trimmed its annual profit forecast for the second time.

U.S.-listed shares of Swiss insurer Chubb gained 4.7%

after Warren Buffett's Berkshire Hathaway ( BRK/A ) revealed a

$6.7 billion stake in the company.

GameStop ( GME ) and AMC Entertainment ( AMC ) slid 30% and

15%, respectively, with the so-called meme stocks extending

Wednesday's losses following a two-day rally sparked by the

social media return of "Roaring Kitty" Keith Gill.

About 17.8 billion shares changed hands across U.S.

exchanges, compared with the average of about 11.5 billion

shares over the last 20 sessions.

Declining issues outnumbered advancers by a 1.2-to-1 ratio

on the NYSE. On the Nasdaq, 1,965 stocks rose and 2,301 fell as

declining issues outnumbered advancers by a 1.17-to-1 ratio.

The S&P 500 posted 64 new 52-week highs and one new low

while the Nasdaq recorded 188 new highs and 58 new lows.