After moving sharply lower over the course of morning trading on Thursday, stocks staged a significant recovery attempt in the afternoon. The major averages climbed well off their worst levels of the day, eventually ending the session mixed.
While the Dow managed to makes its way into positive territory, the Nasdaq and the S&P 500 closed in the red. The Dow crept up 19.61 points or 0.2 percent to 13,145.82, while the Nasdaq slipped 9.60 points or 0.3 percent to 3,095.36 and the S&P 500 edged down 2.26 points or 0.2 percent to 1,403.28.
Profit taking contributed to the early weakness on Wall Street, with some traders cashing in on the recent strength in the markets amid calls by a number of analysts for a correction.
Traders also reacted negatively to the latest batch of U.S. economic data, including a report from the Labor Department showing that weekly jobless claims came in above economist estimates.
The report showed that jobless claims edged down to 359,000 in the week ended March 24th from the previous week's revised figure of 364,000. Economists had expected jobless claims to inch up to 350,000 from the 348,000 originally reported for the previous week.
Although claims came in above estimates, the figure for the latest week reflects the lowest number of jobless claims since April of 2008 due to revisions to the past data.
A separate report from the Commerce Department showed that U.S. economic growth in the fourth quarter was unrevised, as a downward revision to exports was offset by an upward revision to non-residential fixed investment.
The report showed that GDP increased at an annual rate of 3.0 percent in the fourth quarter, unchanged from the previous estimate and in line with economist estimates.
Among individual stocks, Best Buy (BBY) fell by 7 percent after the consumer electronics retailer reported a fourth quarter loss compared to a year-ago profit. The company also announced plans to close 50 stores in the U.S. and to cut 400 jobs.
Mosaic (MOS) also ended the day in the red after the potash producer reported third quarter earnings and revenues that fell from a year-ago. The company also warned of compressed margins for the rest of the year and cut its capital spending outlook for 2012.
On the other hand, shares of Red Hat (RHT) jumped 19.5 percent after the business software developer reported better than expected fourth quarter earnings and announced a $300 million stock buyback.
With the afternoon recovery attempt by the broader markets, most of the major sectors ended the session showing only modest moves.
Nonetheless, considerable weakness remained visible among brokerage stocks, as reflected by the 1.6 percent loss posted by the NYSE Arca Broker/Dealer Index. Morgan Stanley (MS) and Ameriprise Financial (AMP) turned in two of the sector's worst performances.
Housing stocks also saw continued weakness but closed well off their worst levels of the day. After falling by as much as 3.1 percent, the Philadelphia Housing Sector Index closed down by 1.2 percent.
Meanwhile, health insurance stocks showed a strong move to the upside on the day, driving the Morgan Stanley Healthcare Payor Index up by 2.4 percent. The strength in the sector came a day after the Supreme Court wrapped up three days of arguments on the healthcare reform law.
Steel stocks also saw notable strength, resulting in a 1 percent gain by the NYSE Arca Steel Index. AK Steel (AKS) and Cliffs Natural Resources (CLF) posted strong gains.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday, pulling back further off their recent highs. Japan's Nikkei 225 Index fell by 0.7 percent, while Hong Kong's Hang Seng Index slid by 1.3 percent.
The major European markets also showed notable moves to the downside on the day. While the German DAX Index tumbled by 1.8 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index dropped by 1.4 percent and 1.2 percent, respectively.
In the bond market, treasuries moved moderately higher, climbing further off their recent lows. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.7 basis points to 2.159 percent.
Trading on Friday could be impacted by the release of some key economic data, including reports on personal income and spending, Chicago-area business activity, and consumer sentiment.
by RTT Staff Writer
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