By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market erased early
morning losses Thursday but lacked a clear direction, with indexes
dipping in and out of negative territory.
Investors found little solace from generally positive economic
reports, possibly because both were already priced into the
markets.
The fourth-quarter GDP was revised upward to 2.6%, slightly
below the consensus of 2.8%. Weekly jobless claims fell by more
than expected to the lowest level in four months.
A number of Fed officials are scheduled to speak Thursday.
The S&P 500 (SPX) rebounded and was up a point, or 0.1%, to
1,854.06. The Dow Jones Industrial Average (DJI) was up 22 points,
or 0.1%, to 16,290.76.
The Nasdaq Composite (RIXF) was down 5 points, or 0.1%, at
4,170.05.
Follow MarketWatch's live blog of Thursday's stock-market
action.
"Markets always look ahead, so the positive reports on jobless
and GDP -- all about the past, were discounted in early morning,"
said Quincy Krosby, market strategist at Prudential Financial.
"We are in the final days of the first quarter, which means
portfolio managers are shifting and allocating money and perhaps
causing a rotation from the sectors. If we begin to see the
rotation out of cyclicals and into defensive sectors, that would
mean investors are turning cautious," she added.
Government data showed that the economy's growth in the fourth
quarter was bumped up to 2.6%, mainly because of higher health-care
spending, while weekly unemployment benefits fell to the lowest
level in four months, offering further evidence that U.S. layoffs
have slowed sharply and perhaps a hint that hiring is about to pick
up.
Slumping for an eighth month, a gauge of pending home sales fell
0.8% in February to the lowest level in more than two years,
signaling that upcoming activity may slow, the National Association
of Realtors reported.
Among today's Fed officials scheduled to speak, Cleveland Fed
president Sandra Pianalto spoke ahead of the market open.
In a speech at the University of Dayton Pianalto said "no single
data point will determine how long the Federal Reserve can keep
short-term interest rates low."
"We will be watching labor market conditions, indicators of
inflation pressures and inflation expectations, and readings on
financial developments. It is a complicated world out there,"
Pianalto said.
New York Fed President William Dudley will speak on lessons from
"three decades of crises" in New York at 2:30 p.m. Eastern.
Later, Fed Gov. Daniel Tarullo will speak on foreign bank
regulation at Harvard Law School in Cambridge, Mass. at 8:20 p.m.
Eastern, and Chicago Fed President Charles Evans will speak in Hong
Kong about U.S. economic policy at 9:30 p.m. Eastern.
Citigroup slumps after Fed rejects its capital plan
Citigroup (C) shares fell 5% after the bank failed to measure up
to the Federal Reserve's stress-test requirements. Citi wasn't the
only bank to be told late Wednesday that it needs to shore up its
capital plans, but it was the biggest, and the news seemed to catch
investors -- and the bank -- off guard.
Baxter International Inc. (BAX) shares rose 5.1% after the
company said Thursday it plans to split into two entities, one
focused on developing and marketing biopharmaceuticals and the
other on medical products.
Lululemon(LULU) shares jumped 8.2% after posting a steady profit
and higher revenue, but downside guidance.
GameStop (GME) shares fell 7.3% after the company reported
quarterly results below consensus estimates.
Gold fall below $1,300; European stocks fall
In other markets, gold prices (GCJ4) fell below the key
$1,300-an-ounce level, while oil (CLM4) pushed higher.
European stocks struggled and moved lower, while Asia saw a
mixed day, with the Nikkei 225 index jumping 1% as the dollar
(USDJPY) rose back above 102 yen. Media reports also pointed to
reinvestment by a public pension fund for those Japan gains. The
Shanghai Composite Index closed down 0.8%, which came amid reports
the central bank has drained liquidity again.
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