By Anora Mahmudova
NEW YORK (MarketWatch) -- U.S. stocks closed lower on Thursday
after a choppy trade as investors weighed a mixed batch of economic
data and how it would affect the Fed's decision to alter policy in
its rate-setting meeting next week.
The S&P 500 (SPX) closed 7 points, or 0.4%, at 1,775, while
the Dow Jones Industrial Average (DJI) closed 104 points, or 0.7%,
to 15,739, its third consecutive drop.
The Nasdaq Composite (RIXF) closed below 4,000 level for the
first time since November 25. The index, which traded in positive
territory for much of the day closed down 5 points or 0.1% to
3,998.
The S&P 500 has fallen for the third day in a row and
retreated from its all-time high reached earlier this week, but
analysts say this is more due to profit-taking, since the index has
gained 25% year-to-date.
Investors digested positive retail sales figures and
higher-than-expected jobless claims. U.S. consumers were more
confident with their spending in November.
Read about how the market day transpired on the markets live
blog.
Weekly jobless claims, however, shot up to 368,000 from 300,000
the week before, and were higher than the consensus forecast of
325,000. Seasonal factors may have distorted the data, as the
four-week moving average still indicates an improving labor
market.
In another economic news, business inventories rose more than
expected.
"Neither the jobless claims nor the retail sales will move the
Fed's current position on tapering," said John Canally, investment
strategist for LPL Financial. Tapering refers to reduction in the
Federal Reserve's bond-buying program, which the central bank will
be deciding during it meeting next week. The wind down of the $85
billion-a-month bond purchasing program depends on the improvements
in the economy, especially the unemployment rate.
"Markets have been focused on the timing and the slope of Fed
bond-buying tapering and not on anything else, said Uri Landesman,
president of Platinum Partners.
"Not even on the news that the most accomplished and competent
central banker Stanley Fisher is likely to join the Fed. So any
good news is taken as a bad news, which is why we saw the selloffs
after the budget deal was struck."
"What is good for the economy is good for the markets generally,
but that is not the case right now. With solid gains on the S&P
500 so far they have been wanting to sell anyway and will do so for
the seemingly wrong reasons," Landesman added.
* The buzz: The market, by many measures, does appear to be on
solid ground heading into 2014, but investors need a sobering
splash in the face, says MarketWatch's latest Need To Know
column.
* Today's movers & shakers: Facebook Inc. rose 5% following
news of the company's inclusion in the S&P 500. Lululemon
Athletica Inc. shares fell 11.6% after quarterly results showed
earnings per share of 45 cents on net revenue of $379.9 million but
warned of flat fourth-quarter sales, well below analysts
expectations. The biggest gainer on the S&P 500 was Southwest
Airlines Inc , rising 4.6% after Bank of America upgraded the stock
to buy from neutral. Hilton Worldwide Holdings rallied 7.5% on its
first trading day. Procter & Gamble Company and Cisco Systems
Inc. were the laggards on the Dow. Read more in the Movers &
Shakers column.
* Other markets: Gold futures fell sharply and crude oil edged
higher. Stocks in Shanghai and Hong Kong closed lower, and so did
the European stock.
Read more on MarketWatch:
-- Fidelity pulls plug on IRA investments in bitcoins
-- Lululemon's exercise in damage control
-- Global economy's recovery is a sheep in wolf's clothing
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