Stocks Come Off the Mat

"If Tuesday was just an aberration, then we should have gained back half of the loss," said Marc Pado, U.S. market strategist with Cantor Fitzgerald. "Being up 50 points [on the Dow] when we should have been up 200 or more means that the economic data and investor sentiment was worth 150 points of downside pressure."

"We had effectively wiped out all of the gains made since Dec. 4," added Pado. "There has been significant technical damage in this decline."

Little relief was found in the remainder of Thursday's economic data. The Commerce Department said that personal income rose a greater-than-expected 1% in January. Excluding food and energy, the personal consumption expenditure price index is now higher by 2.3% over the past year, outside of the Federal Reserve's comfort zone range of 1% to 2%.

Meanwhile, the Labor Department said that initial jobless claims rose by 7,000 to 338,000 last week. The less volatile four-week moving average increased by 7,500 claims to 335,250.

Treasuries were recently clinging to gains. The 10-year note was up 6/32 in price, yielding 4.55%, and the 30-year bond was gaining 7/32 to yield 4.67%.

Commodities were mixed. Crude oil reversed losses and was higher by 21 cents, finishing at $62 a barrel at the New York Mercantile Exchange, while gold was lower by $7.40 to $665.10 an ounce. Natural gas slipped 2 cents to $7.28 per million British thermal units.