Stocks Manage Mixed Close After Lackluster Jobs, GDP Data

NEW YORK ( TheStreet) -- U.S. stocks closed Thursday's trading session mixed amid weak European markets and a weekly initial jobless claims miss.

The Dow Jones Industrial Average finished up 19.6 points, or 0.2%, at 13,146. The S&P 500 lost 2.3 points, or 0.2%, at 1403. The Nasdaq shed 9.6 points, or 0.3%, at 3095.

The Department of Labor reported that weekly initial jobless claims ended March 24 fell by 5,000 to 359,000 from the prior week's revised level of 364,000. The latest update was disappointing because economists were expecting 350,000 claims, according to Thomson Reuters, after an original reading of 348,000 last week.

RDQ Economics, however, noted that the four-week average of claims fell 3,500 to 365,000, which the firm said was the lowest level for the four-week average since May 2008.

"The new seasonal adjustment factors have revised up the level of jobless claims in the first quarter of 2012 but they have not revised away the essential message of the report--the labor market and job creation appears to have strengthened significantly in the first quarter of the year," the firm said in commentary on Thursday. "The indications from jobless claims, consumers' attitudes toward the labor market, and regional manufacturing indicators from the New York Fed and Philadelphia Fed are that March will likely be the fourth consecutive month in which nonfarm payroll growth exceeds 200,000."

A report on economic growth came in line with expectations. The government's third read on GDP growth in the fourth quarter of 2011 was unrevised at 3%. This is up from 1.8% annualized growth rate in the third quarter, although still worrisome given that growth is expected to pull back going into the first quarter of 2012.

"The pace of improvement is leveling out and while GDP was not revised the sub components were a bit better for the economy with better final sales and a downtick in the inventory contribution," said David Ader, strategist with CRT Capital.

"In the medium term, we might see more volatility," said Zahid Siddique, portfolio manager with Gabelli Equity Trust of GAMCO Investors. "Stocks have had a good run up... but some of the economic data is starting to show a deceleration in growth."

The U.S. market was following losses in Europe after the European Commission said an index of executive and consumer sentiment fell to a reading of 94.4 in March from a revised 94.5 in February.

With Greece's troubles largely falling out of the spotlight, investors have been keeping an eye on deficit problems in Portugal and Spain, were sovereign debt yields have climbed recently. On Friday, European governments meet in Copenhagen where they will aim to increase the rescue firewall in the region. German Chancellor Angela Merkel is expected to allow the increase.

Germany's DAX finished down 1.8% while London's FTSE was down 1.2%. The Hong Kong Hang Seng closed down 1.32% while the Nikkei Average in Japan finished lower by 0.67% overnight.

On Wednesday, stocks fell along with commodities. Materials and energy stocks dragged down the market amid disappointing domestic and European economic data before the materials sector edged higher at the close. A report on durable goods in the U.S. saw a bounce in February, but came in lower than expected.

In corporate news, Best Buy ( BBY), the electronics retailer, reported fiscal fourth-quarter profit of $2.47 a share, excluding items, on revenue of $16.73 billion. Analysts were expecting profit of $2.16 a share on revenue of $17.2 billion. Same-store sales dipped 2.4%; Wall Street was expecting a decline of 0.6%. Shares fell 7% to $24.77.

Swiss pharmaceutical company Roche increased its unsolicited offer for Illumina ( ILMN) to $51 a share, valuing the U.S. diagnostics company at more than $6.5 billion. Roche's previous offer of $44.50 a share was rejected by Illumina's board as being too low. Illumina told its shareholders to "take no action at this time." Shares of Illumina gained 5.1% at $52.40.

Red Hat ( RHT), the open source software company, posted earnings in the February-ended quarter that topped analysts' estimates. Red Hat reported a non-GAAP adjusted profit of $57.2 million, or 29 cents a share, on revenue of $297 million, up more than 20% from last year. Analysts were expecting earnings of 27 cents a share on revenue of $291.2 million. The company also unveiled a $300 million buyback program. Shares surged 19.5% to $61.43.

Red Lion Hotels ( RLH) announced plans to explore strategic options. The company said its board has hired Bank of America Merrill Lynchto look at ways to "maximize shareholder value, including a potential sale of the company or a strategic combination with a third party." Shares were up 5.7% to $8.53.

May oil futures closed behind by $2.63 to $102.78. In other commodities, June gold futures settled down $5.60 to $1,654.90 an ounce.

The dollar index was flat. The benchmark 10-year Treasury was up 12/32 diluting the yield to 2.161%.

-- Written by Chao Deng and Andrea Tse in New York.

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