By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks gave up opening gains on
Thursday and turned lower as investors digested data on weekly
jobless claims and focused on corporate earnings reports.
The S&P 500 index (SPX) fell 5 points, or 0.3% to 1,832.98.
The benchmark index has fallen in three out of four sessions since
the new year.
The Dow Jones Industrial Average(DJI) lost 63 points, or 0.4% to
16,400.54. The technology-heavy Nasdaq Composite(RIXF) dropped 18
points, or 0.4% to 4,147.48.
The number of Americans who applied to receive unemployment
benefits in the first week of the new year fell to the lowest level
since the end of November. In the week ended Jan. 4, initial
jobless claims fell by 15,000 to a seasonally adjusted 330,000, the
U.S. Department of Labor said Thursday. That matched the forecast
of economists polled by MarketWatch.
Investors are awaiting the official unemployment figures due to
be released on Friday. Setting the tone for Friday's job data, was
an upbeat report from Automatic Data Processing, showing that
private employers created 238,000 jobs in December, exceeding
estimates.
Investors also focused on European Central Bank chairman Mario
Draghi's relatively dovish tone during the press conference,
following the central bank's decision to hold its main interest
rates unchanged at 0.25%. Earlier, Bank of England also left the
rates unchanged at 0.5%. Read the transcript from the live blog
here.
Douglas Cote, chief investment strategist at ING investment
management, said that current pullback is reasonable and expected,
given strong gains in the stock markets in 2013.
"The baton has been passed down from the Fed to markets.
Consistently good economic news is going to raise the questions of
Fed accelerating tapering, which we believe will end by the end of
2014.
Essentially, fundamentals drive markets: manufacturing,
consumers and corporate profits -- all of which are growing and
bode well for stocks in 2014. However, consistent good economic
news begets more volatility. Markets will have to get used to
higher volatility to be rewarded, as market-friendly quantitative
easing is gradually withdrawn."
* Central banks: On Thursday, the Bank of England and the
European Central Bank kept interest rates on hold. Janet Yellen,
incoming Federal Reserve Chairwoman in an interview with Time
magazine, said that the U.S. economy would see stronger growth this
year. Kansas City Fed President Esther George will deliver a speech
on banking and the economy to the Wisconsin Bankers Association in
Madison, Wis., at 1:30 p.m. Eastern.
* Movers and shakers: Bed Bath & Beyond Inc. shares fell
12.9% after the retailer reported fiscal third-quarter earnings and
trimmed its outlook late Wednesday. Macy's Inc. jumped 7.5% after
the retailer said it would lay off 2,500 workers and close five
underperforming stores. Family Dollar Stores, Inc. shares slid 6.5%
after the discount retailer's quarterly results missed
expectations. Apple Inc. shares were in focus after saying it will
try to reach a settlement with Samsung on their long-running patent
fight ahead of a new trial that is scheduled to begin in March in
California. Chief executives from both companies will meet before
Feb. 19 with a mediator following a meeting on Monday to discuss
"settlement opportunities." Apple shares rose 0.5%. J.C. Penney Co.
Inc. climbed 5.1%, recouping some of its 10% loss from the previous
session after the firm made veiled comments about its holiday
sales. Airline companies added to the previous days gains,
following an upbeat outlook on the sector from J.P. Morgan. Delta
Air Lines, Inc added 3.7%, United Continental Holdings Inc. soared
10.5% while Southwest Airlines Co added 3.3%.
* In other markets: Underpinning gains for stock futures, Europe
stocks were rising, while Asia put on a mixed performance. Chinese
inflation data for December met expectations with a rise of 2.5% on
the year. The euro weakened against the dollar on Draghi's
comments, while gold prices were steady, and crude oil was higher.
Bank of America Merrill Lynch cut its gold forecast by 11% for 2014
to $1,150 an ounce, citing the lack of investor buying as a key
concern.
More stories from MarketWatch:
U.S. jobless claims fall to five-week low
Live blog: European Central Bank President Mario Draghi's news
conference
Bank of America Merrill Lynch slashes gold call
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