By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- The S&P 500 index eked out a
marginal gain on Thursday, while the Dow Jones Industrial Average
dropped, weighed down by losses for Verizon Communications Inc. and
AT&T Inc.
The S&P 500 index (SPX) ended the day fractionally higher at
1,838.13. The benchmark index rose only in two out of six sessions
since start of the new year, but is still hovering near its peak
reached on Dec. 31.
The Dow Jones Industrial Average (DJI) lost 17.98 points, or
0.1% to 16,444.76, with Verizon (VZ) and AT&T (T) both dropping
2%.
The Nasdaq Composite (RIXF) slipped 9.42 points, or 0.2% to
4,156.19.
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 employment 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 President Mario
Draghi's relatively dovish tone during the press conference
following the central bank's decision to hold its main interest
rate unchanged at 0.25%. The 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 the 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," Cote said.
"Essentially, fundamentals drive markets: manufacturing,
consumers and corporate profits -- all of which are growing and
bode well for stocks in 2014," he said. "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quantitative easing is gradually withdrawn."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, said in an interview with Time
magazine that the U.S. economy would see stronger growth this
year.
* Movers and shakers: Bed Bath & Beyond Inc. shares fell
12.5% after the retailer reported fiscal third-quarter earnings and
trimmed its outlook late Wednesday. Macy's Inc. jumped 7.6% after
the retailer said it would lay off 2,500 workers and close five
underperforming stores. Family Dollar Stores Inc. shares recouped
sharp losses but still closed 2% lower after the discount
retailer's quarterly results missed expectations. Apple Inc. shares
fell 1.3% 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." J.C. Penney Co. Inc. climbed 3.7%, 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 day's gains, following an upbeat outlook on the sector
from J.P. Morgan. Delta Air Lines Inc added 4.2%, United
Continental Holdings Inc. soared 6.8% while Southwest Airlines Co
added 2.9%.
* In other markets: European stocks finished lower. Asian
markets were mostly lower as Japan gave away much of its gains from
the previous session, while Chinese data weighed on stocks in
China. The euro weakened against the dollar on Mario Draghi's
comments, while gold prices gained, and crude oil fell. 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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