Stocks Stop the Bleeding

The GDP report is the second of three that will ultimately be released on the fourth quarter.

Shortly after the opening bell, the Chicago purchasing managers' index showed a decline to 47.9 in February from 48.8 in January. Though the Chicago PMI specifically discusses manufacturing activity in the Midwest, it's closely watched for clues about the overall stability of the nation's factory sector.

Additionally, the Census Bureau said new-home sales plummeted 16.6% to 937,000 annualized units. Economists had anticipated a slight decrease to 1.09 million annualized units from 1.12 million in December.

"We got two tests for the market since the open in the form of the Chicago PMI index and new-homes sales data," said Al Goldman, chief market strategist with A.G. Edwards. "After yesterday's extreme bloodletting, the market will hopefully continue to show resilience. We're testing the mettle of this market."

On the corporate news front, Home Depot (HD Quote) offered disappointing sales guidance for fiscal 2008, saying the residential housing market probably won't improve until at least the second half of this year.

Home Depot lost 23 cents, or 0.6%, to close at $39.59. Rival Lowe's (LOW Quote) fell by 67 cents, or 2.1%, to $32.57.

Sprint Nextel (S Quote) posted quarterly results that were in line with estimates, and the phone company said this year's revenue should also be around what analysts are expecting. Shares of Sprint jumped 84 cents, or 4.6%, to $19.29.