Stocks ticked down from record highs on Thursday as traders contemplated their next move following three weeks of nearly nonstop gains.

The Nasdaq Composite finished just slightly below its flat line while the S&P 500 and the Dow Jones Industrial Average lost 0.2% and 0.4%, respectively. Small caps underperformed, sending the Russell 2000 lower by 0.6%. The major averages finished near the middle of their trading ranges.

Financials headlined the earnings front once again on Thursday with Morgan Stanley (MS 55.84, +0.49) and Bank of New York Mellon (BK 55.35, -2.54) reporting their fourth quarter results. Morgan Stanley rose 0.9% after beating earnings and revenue estimates, while BNY Mellon tumbled 4.4% after reporting below-consensus revenues. The S&P 500's financial sector lost 0.1%.

Meanwhile, the top-weighted technology space was among the strongest groups, rising 0.2%, with Facebook (FB 179.80, +2.20) setting the pace; FB shares climbed 1.2%, breaking a three-session losing streak. Chipmakers also outperformed, evidenced by the 0.5% increase in the PHLX Semiconductor Index, which is now up 9.4% year to date.

On the downside, the industrial sector shed 0.6% as two of its largest components by market cap--Boeing (BA 340.16, -10.85) and General Electric (GE 16.77, -0.58)--dropped 3.1% and 3.3%, respectively. Boeing's loss came on the heels of a two-week rally that pushed BA shares higher by 18.3%, while GE's decline extended its four-session loss to 11.7%.

The energy sector was among the weakest groups, losing 0.8%, despite the Department of Energy's weekly crude oil inventory report, which showed that U.S. stockpiles declined for a ninth consecutive week, dropping by 6.9 million barrels. West Texas Intermediate crude futures ticked down 0.1% to $63.93 per barrel.

The rate-sensitive utilities (-0.6%) and real estate (-1.0%) sectors finished with energy at the bottom of the sector standings as selling in the Treasury market increased yields on longer-dated issues. The benchmark 10-yr yield jumped four basis points to 2.61%--its highest level since March 2017. Conversely, the 2-yr yield slipped two basis points to 2.03%.

In Washington, lawmakers still have yet to agree on a short-term funding measure, making a government shutdown a real possibility. The House is expected to vote on a bill late Thursday evening, but, as it currently stands, that bill doesn't appear to have enough votes to pass in the Senate. To avoid a shutdown, an agreement will have to be reached by 11:59 PM on Friday.

Elsewhere, the major European bourses settled Thursday mixed with the UK's FTSE losing 0.3% and Germany's DAX climbing 0.7%. Equity indices in the Asia-Pacific region finished mostly higher, but Japan's Nikkei underperformed, shedding 0.4%.

Reviewing Thursday's economic data, which included Housing Starts and Building Permits for December, weekly Initial Claims, and the Philadelphia Fed Index for January:

• Housing starts decreased to a seasonally adjusted annualized rate of 1.192 million units in December (Briefing.com consensus 1.280 million), down from a revised 1.299 million units in November (from 1.297 million). Building permits decreased to a seasonally adjusted 1.302 million in December (Briefing.com consensus 1.290 million) from a revised 1.303 million in November (from 1.298 million).
  • The key takeaway from the report is that single-family housing starts were impacted by severe winter weather in the Northeast and the South. Single-family permits increased 1.8%.
• The latest weekly initial jobless claims count totaled 220,000, while the Briefing.com consensus expected a reading of 251,000. Today's tally was below the unrevised prior week count of 261,000. As for continuing claims, they rose to 1.952 million from a revised count of 1.876 million (from 1.867 million).
  • Initial claims have pulled back after a recent pick-up, leaving the series comfortably below the 300,000 level for the 150th consecutive week, meaning labor market conditions remain favorable.
• The Philadelphia Fed Survey for January decreased to 22.2 from a revised 27.9 in December (from 26.2) while economists polled by Briefing.com expected a reading of 24.5.
  • The key takeaway from the report is that while the index has slipped into the bottom end of its recent range, it continues pointing to expanding manufacturing activity in the Philadelphia Fed region.

On Friday, investors will receive just one economic report--the preliminary reading of the University of Michigan Consumer Sentiment Index for January (Briefing.com consensus 97.0)--which will be released at 10:00 AM ET.

• Nasdaq Composite: +5.7% YTD
• Dow Jones Industrial Average: +5.3% YTD
• S&P 500: +4.7% YTD
• Russell 2000: +2.7% YTD