Stocks Erase Gains in Late Trading
Cooper Howes, U.S. economist for Barclays, said that the initial jobless claims numbers were a "solid" improvement from the prior week and are the latest evidence that the labor markets are steadily improving.
However, the positive data was offset by a relatively disappointing GDP report. The Bureau of Economic Analysis' second estimate on fourth-quarter gross domestic product was an increase of 0.1% versus a decrease of 0.1% in the previous estimate. Economists were expecting a revised increase of 0.5%.
"While not negative any more, the weakness in fourth-quarter GDP still looks grossly exaggerated; other data, such as employment growth and the ISM indexes, suggest that the trend is at least 2%, perhaps better than that," Jim O'Sullivan, chief U.S. economist at High Frequency Economics, said in a note. "To some extent, the weakness in [the] fourth-quarter was pay back for what may have been exaggerated strength in [the] third quarter."
Overseas markets were mostly higher Thursday amid confidence that global central banks will continue to lend support to the economy. European Central Bank President Mario Draghi also said that he anticipates accommodative policies to continue.The Nikkei Average in Japan finished ahead by 2.71% and the Hong Kong Hang Seng index finished up 1.96%. The FTSE 100 in London rose 0.55% and the DAX in Germany closed up 0.86%. Gold for April delivery settled off $17.60 at $1,578.10 an ounce at the Comex division of the New York Mercantile Exchange, while April crude oil futures closed down 71 cents to $92.05 a barrel. The benchmark 10-year Treasury was rising 4/32, diluting the yield to 1.889%. The dollar was rising 0.47%, according to the U.S. dollar index. In corporate news, J.C. Penney's (JCP) fourth-quarter loss widened from a year earlier as sales plunged almost 30%. Shares plunged 17%. Groupon (GRPN), the daily deals company, missed Wall Street's fourth-quarter earnings estimates. Shares plummeted 24.3%. Sears (SHLD) posted fourth-quarter earnings of $1.12 a share on revenue of $12.26 billion as Sears' domestic comparable-store sales improved 0.8%. Analysts, on average, were expecting earnings of 98 cents a share on revenue of $11.77 billion. Earnings beat expectations, but were primarily the results of cost cutting programs. Shares slipped 5.2%.
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