Stocks Erase Gains in Late Trading

NEW YORK ( TheStreet) -- Major U.S. stock averages dived in the final hour of trading on Thursday, reversing day-long gains, as a lower-than-expected revision in fourth-quarter gross domestic product data offset better-than-anticipated Chicago business activity and jobless claims reports.

The markets have largely continued to shrug off sequestration deadline concerns, with the Dow still hovering near its all-time closing high of 14,164 as monetary stimulus reassurances offset the fiscal drag. The Dow peaked at 14,149.15 on Thursday.

The Dow Jones Industrial Average lost 20.88 points, or 0.15%, to 14,054.

Breadth was negative, with laggards outpacing gainers 19 to 11. Procter & Gamble ( PG), Wal-Mart ( WMT) and United Health ( UNH) were among the sharpest percentage blue-chip decliners.

Home Depot ( HD), Coca-Cola ( KO), Hewlett-Packard ( HPQ) and DuPont ( DD) were among the stocks that gained.

The S&P 500 closed off 1.31 point, or 0.09, at 1515. The Nasdaq dropped 2.07 points, or 0.07%, to 3160.

Sectors in the broader market were mixed, led higher by consumer cyclicals, and transportation. Basic materials and conglomerates were deepest in the red.

Volumes totaled 3.8 billion shares on the Big Board and 1.99 billion on the Nasdaq. Advancers edged decliners incrementally on the New York Stock Exchange, while losers slightly outpaced winners on the Nasdaq.

In U.S. economic news Thursday, the Chicago PMI ticked up to 56.8 in February from 55.6. Economists were expecting levels to fall to 54.

"Overall, this was a solid report -- consistent with the strong Empire State and Richmond Fed surveys, but in contrast to the headline decline in the Philly Fed survey -- and suggests upside risk on tomorrow's ISM manufacturing report," Jan Hatzius, chief U.S. economist at Goldman Sachs, wrote in a note.

The Labor Department said initial jobless claims in the week ended Feb. 23 were 344,000, a decrease of 22,000 from the previous week's upwardly revised 366,000. The four-week moving average was 355,000, a decline of 6,750 from the previous week's 361,750.

Continuing claims in the week ended Feb. 16 were 3.074 million, a fall of 91,000 from the preceding week's upwardly revised level of 3.165 million.

Economists, on average, predicted initial jobless claims of 360,000 and continuing claims of 3.15 million.

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