Stocks Battle Back to Finish With Mild Losses


NEW YORK (TheStreet) -- Stocks battled back to close with mild losses on Thursday as strength in the consumer cyclicals, energy and utilities sectors offset weakness in the financials and technology.

All three major U.S. equity indices were down more than 1% at their lows of the session but buyers arrived in the final hour of what was a busy news day that featured a report that JPMorgan Chase's infamous trading loss on credit derivatives could climb as high as $9 billion, the Supreme Court's decision to uphold President Obama's sweeping health care legislation, and start of a two-day meeting of Europe's leaders in Brussels about the region's debt crisis.

The Dow Jones Industrial Average fell nearly 25 points, or 0.20%, to close at 12,602. The blue-chip index rallied more than 150 points off its session low of 12,450.

The S&P 500 gave back 3 points, or 0.21%, to finish at 1329, ending its two-day winning streak. Its low for the day was 1313.

The tech-heavy Nasdaq dropped roughly 26 points, or 0.90%, to settle at 2849.

Within the Dow, 16 of the 30 components were lower, led by JPMorgan, Intel ( INTC), Cisco ( CSCO) and United Technologies ( UTX).

Shares of JPMorgan shares fell nearly 2.5% following a The New York Times report that said the losses tied to the firm's hedging-related trading debacle could balloon to as much as $9 billion. The report cited people who have been briefed on the situation. Previous reported estimates had the bank's potential liability topping out at around $5 billion.

The Times said JPMorgan is now out of more than half of the trade and may be completely free before the end of this year. The bank plans to disclose part of the total losses on the trade on July 13, when it reports its second-quarter results.

Among the blue chips finishing in positive territory were AT&T ( T), Chevron ( CVX), Kraft Foods ( KFT), and Chevron ( CVX).

Breadth on the New York Stock Exchange was slightly positive while losers still outpaced winners on the Nasdaq by a 1.5-to-1 ratio.

The FTSE in London finished lower by 0.56% and the DAX in Germany finished behind by 1.27%. The Hong Kong Hang Seng index settled down by 0.79% and the Nikkei in Japan closed ahead by 1.65%.

In U.S. economic news, the Labor Department reported Thursday that initial jobless claims for the week ended June 23 fell 6,000 to 386,000 from the previous week's upwardly revised figure of 392,000, foreshadowing weakness in the upcoming monthly jobs report. Economists were calling for initial claims of 385,000, according to Briefing.com.

The four-week moving average was 386,750, a decrease of 750 from the previous week's average of 387,500.

Continuing claims for the week ended June 16 was 3.296 million, a decrease of 15,000 from the preceding week's level of 3.311 million.

First quarter gross domestic product remained at the 1.9%, as expected, according to a final read by the Commerce Department, and continues to represent a slowing from the 3% gain reported in the fourth quarter of 2011.

RBC economists noted that this latest report does not alter the picture of the U.S. economy growing at a "sub-potential rate."

August crude oil futures rose 85 cents to settle at $80.21 a barrel after trading below $80 for the majority of the session. August gold futures shed $28 to settle at $1,550.40 an ounce.

The benchmark 10-year Treasury rose 11/32, diluting the yield to 1.586%, while the greenback ticked up 0.20%, according to the dollar index.

In corporate news, the board of News Corp. ( NWS) unanimously approved a plan to split the media giant into two, separating its entertainment operations from its smaller publishing business. The split was formally announced early Thursday morning.

One company will house entertainment businesses like 20th Century Fox, Fox broadcast network and Fox News Channel, while the other would house the publishing assets, which include the The Wall Street Journal and HarperCollins book publishing. Shares finished down less than 1%.

Family Dollar Stores ( FDO) reported third-quarter net income Thursday of $124.5 million, or $1.06 a share, up from year-earlier earnings of $111.1 million, or 91 cents a share. On average, analysts were anticipating third-quarter profit of $1.07 a share.

Family Dollar said it expects fourth-quarter same-store sales to rise between 5% and 7% and projects fourth-quarter earnings per share of between 71 cents and 81 cents a share. For the fourth quarter, analysts are expecting earnings of 77 cents a share. The stock lost nearly 3%.

Shares of both Nike ( NKE) and Research In Motion ( RIMM) were losing ground after the bell following disappointing quarterly results.

Nike reported a fiscal fourth-quarter profit of $549 million, or $1.17 a share, on revenue of $6.47 billion. The company said earnings fell year-over-year because of a lower gross margin and higher SG&A spending. The average estimate of analysts polled by Thomson Reuters was for earnings of $1.37 a share in the quarter on revenue of $6.51 billion. The stock lost more than 9% in extended action.

Shares of Research In Motion were down more than 15% in after-hours action after the company reported a wider than expected operating loss for its fiscal first quarter, delayed the launch of its BlackBerry 10 until the first calendar quarter of 2013, and announced plan to lay off 5,000 employees as part of a restructuring.


-- Written by Andrea Tse and Alexandra Zendrian in New York.

>To contact the writer of this article, click here: Andrea Tse.

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