LONDON – US stock indexes fell on Thursday following the latest batch of quarterly corporate earnings reports, while data showed the number of Americans filing new claims for unemployment benefits fell last week as expected.

Eight of the 11 major S&P 500 sector indexes were trading lower, with technology falling 0.5 percent and set to snap a four-day winning streak.

The S&P 500 banks index fell 0.8 percent, tracking a dip in bond yields. Morgan Stanley edged 0.4 percent lower even as it reported a better-than-expected quarterly profit.

At 9:47 am ET, the Dow Jones Industrial Average was down 104.42 points, or 0.30 percent, at 34,828.81, the S&P 500 was down 13.19 points, or 0.30 percent, at 4,361.11 and the Nasdaq Composite was down 49.65 points, or 0.34 percent, at 14,595.30.

The Labor Department said initial claims for state unemployment benefits fell 26,000 to a seasonally adjusted 360,000 for the week ended July 10.

Meanwhile, the second-quarter earnings season began on a strong note this week, with the four largest US lenders – Wells Fargo & Co, Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co – posting a combined US$33 billion in profits.

Elsewhere, Europe's share markets spluttered and government bond yields burrowed lower after the head of the Federal Reserve dampened taper talk and traders struggled with the rapid global rise in COVID-19 Delta variant cases.

There was a giant helping of Chinese data to digest too, as well as forecast-topping Morgan Stanley earnings and a dip in weekly US jobless claims.

Thursday's Chinese data showed average growth surpassed Q1, while June retail sales and industrial output beat expectations. 

But markets' delight after Fed Chair Jerome Powell told Congress he saw no need to rush the shift towards tighter post-pandemic monetary policy had not lasted long.

Japan's Nikkei had fallen more than 1 percent overnight following a late dip from Wall Street and, though China's bourses rallied after its data, London, Paris, Frankfurt and S&P 500 futures were all 0.3 percent-1 percent lower ahead of US trading.

The main all-world indexes were also off their recent record highs, tempered possibly by rising COVID-19 cases around the globe and signs the post-pandemic bounce in company earnings may also be hitting a peak.

The World Health Organization (WHO) COVID-19 dashboard reported the first weekly rise in global deaths from the virus in 10 weeks and a 5.6 percent jump in daily case numbers on Wednesday.

"The market is fearing the Delta variant could take a hold of different economies so you are almost seeing that we are back to the 'bond yields lower, tech doing well' scenario," said Justin Onuekwusi, portfolio manager at Legal & General Investment Management.

Mysterious ways

Traders were also waiting for the Philadelphia Fed's closely followed business confidence survey and whether the second day of Powell's testimony to the US Congress, which starts at 1330 GMT (0930 ET), would provide any more signals.

He had said on Wednesday that the US economy was "still a ways off" from levels the central bank wanted to see before tapering its monetary support.

He also said he was confident that the recent rise in inflation associated with the country's post-pandemic reopening would fade.

His comments came after data published this week showed consumer prices increased by the most in 13 years in June.

Government bond yields, which reflect borrowing costs and move inverse to price, dipped globally. The 10-year US Treasuries yield slipped to 1.3257 percent, having peaked at 1.423 percent on Wednesday, while Japan's 10-year yields touched the lowest level of the year.

The yield on inflation-protected US bonds, sometimes called the real yield, dropped to minus 1.027 percent, near its lowest levels since February. Germany's bunds went as lows at -0.342 percent.

While Powell's comments fanned buying in bonds, concerns about inflation hardly disappeared.

"The (US) CPI numbers were pretty shocking to me," said Nobuyasu Atago, chief economist at Ichiyoshi Securities. "People say rises in used car prices are the main culprit but it's not just that. New cars, home electronic goods and services are all rising. And the past record shows when energy prices rise, that impact normally last for about two years."

Nevertheless, Powell's dovish stance had put a minor dent on the US dollar in the currency markets, though it didn't last long.

The euro drifted back to US$1.1810 from US$1.1845 after touching a three-month low of US$1.1772. The dollar stood at 109.73 yen after a 0.6 percent fall on Wednesday. 

The Chinese yuan dipped to 6.4628 per dollar in Asia after hitting a three-week high of 6.4508 overnight.

Gold jumped to a one-month high of US$1,829.8 per ounce on Wednesday and last stood at US$1,827.9.

Oil prices dropped though, after major global oil producers came to a compromise about supply and after US data showed demand slacked off a bit in the most recent week.

Brent futures lost 1.3 percent to US$73.76 per barrel. US crude futures dropped away from this month's 7-year high to just under US$72 per barrel, while London-listed oil majors Royal Dutch Shell and BP fell roughly 3 percent in European trading.