By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks finished Thursday
generally higher, with the S&P 500 index closing at a record
level for the 50th time in the past 12 months. However, sharp
declines in biotech stocks dragged the Nasdaq Composite into the
red.
Investors focused on a number of economic reports and speeches
from several Federal Reserve officials as well as remarks from the
ECB President Mario Draghi, after the european central bank left
the interest rates unchanged.
The main indexes were boosted by a larger-than-expected drop in
weekly jobless claims ahead of a official payrolls report on
Friday. Soft jobs report is already baked into U.S. markets
The S&P 500 (SPX) hit an intraday high in early trade, but
gains petered out by the close. The benchmark index still closed at
a record level, adding 3.22 points, or 0.2%, to 1,877.03.
The Dow Jones Industrial Average (DJI)closed 61.71 points, or
0.4%, higher at 16,421.89.
The Nasdaq Composite (RIXF) reversed earlier gains and closed
down 5.85 points, or 0.1%, at 4,352.13. The biotechnology and
pharmaceuticals were the biggest losers on the index on Thursday.
The iShares Nasdaq Biotechnology ETF (IBB) dropped 2.7%.
Read the recap of our stock market live coverage.
"Jobless claims falling to a three-month low sets us up for
tomorrow's payrolls report. Unless it comes dramatically lower,
investors will shrug it off as the weather factor is already baked
into expectations," said Chris Gaffney, senior market strategist at
EverBank.
Before the opening bell, a report on weekly jobless claims
showed a larger-than-expected drop in the week ended March 1. The
number of people who applied for U.S. unemployment benefits fell by
26,000 to 323,000 in the week ended March 1, marking the lowest
level since late November, the Labor Department said Thursday.
Like other economic reports, claims have been distorted by a
harsh winter. The four-week average that reduces the effects of
weather and other unusual factors fell by 2,000 to 336,500, and
it's shown little change in 2014. The jobless claims data come
ahead of Friday's nonfarm-payrolls report, which is expected to
show job gains of around 140,000 for February.
U.S. productivity growth in the fourth quarter was reduced to a
1.8% annual rate instead of 3.2% as originally reported, the Bureau
of Labor Statistics said. The revision matched economists'
forecasts.
Orders for goods produced in U.S. factories fell 0.7% in
January, the Commerce Department said Thursday. Economists surveyed
by MarketWatch expected orders to fall by 0.6%.
Apart from economic reports, several Federal Reserve officials
speaking Thursday attracted investors' attention.
Staples, Costco earnings disappoint
Staples (SPLS) shares slumped 15% after the company posted
declines in sales and traffic for its fiscal fourth quarter,
disappointing Wall Street. It also forecast a sales decline in the
first quarter of 2014 and said it would close 225 stores by the end
of 2015.
Costco (COST) dropped 2.8% after fiscal second-quarter profit
declined 15%. The retailer said the first four-week period of the
quarter made up the bulk of earnings underperformance. Same-store
sales rose 4% in the U.S. and 5% internationally.
Children's Place Retail Stores Inc. (PLCE) shares closed 7.4%
after the retailer of children's clothes posted a fall in earnings
and sales year-over-year and said it sees first-quarter comparable
sales off 2% to 4%.
Shares in Yum! Brands (YUM) rallied 3.3% after analysts at R.W.
Baird raised the stock to outperform from neutral.
Among top performers on the S&P 500 were Valero Energy(VLO)
and Marathon Petroleum Corp (MPC) -- up 5.2% and 3.8%,
respectively. Both energy companies participated at Bank of America
Merrill Lynch Refining Conference on Thursday.
Fed officials line up
New York Fed President William Dudley was interviewed by The
Wall Street Journal. "It seems to us the economy should be better
in 2014 than in was in 2013," he said.
Atlanta Fed President Dennis Lockhart's speech on the economic
outlook at Georgetown University in Washington D.C. is due at 6
p.m. Eastern.
Philadelphia Fed President Charles Plosser told CNBC on Thursday
that he's "very worried" about potential for unintended
consequences of the Fed's quantitative easing program. He told CNBC
that the U.S. "may never return" to its previous growth rates, and
it could be "many, many years" before that happens.
Late Wednesday, Richard Fisher, president of the Federal Reserve
Bank of Dallas, said in a speech in Mexico City that he was
concerned about "eye-popping levels" of some stock markets, and
that the central bank must monitor signs carefully to be sure
another bubble isn't forming.
European stocks pared advances after ECB President Mario Draghi
offered no fresh easing measures to fight the euro zone's low
inflation. Asian markets closed on a largely stronger footing.
Oil prices recovered and settled slightly higher. Gold prices
also rose, while the dollar weakened against other major
currencies.
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