NEW YORK (TheStreet) -- Stocks regained positive momentum by mid-afternoon, though weaker-than-expected domestic data and the materials sector continued to keep gains limited.
The S&P 500 was up 0.1%, the Dow Jones Industrial Average added 0.17%, and the Nasdaq gained 0.3%.
Initial jobless claims for the week ended Feb. 27 came in higher than expected, prompting fears Friday's official jobs report would show similar weakness. Markets were spooked on Wednesday after a sub-par employment report foreshadowed potential labor market softness in February.
"The big question is going to be whether we see disruptions from weather that make it hard to tell whether we continue to see the strength in hiring that we've seen for the last three months," said Kate Warne, investment strategist at Edward Jones, in a call. "There's a little bit more cloudiness around this jobs report."
Expectations are for 235,000 jobs to have been added to nonfarm payrolls in February compared to 257,000 a month earlier. The unemployment rate is forecast to tick down 100 basis points to 5.6%. Hourly earnings are expected to increase 0.2%, adding to the previous month's 0.5% gain.
Fourth-quarter productivity and costs were revised down to a decline of 2.2% from a previous 1.8% drop. However, that came in slightly narrower than an expected 2.3% decline. January factory orders were also sluggish, falling 0.2% to $470 billion compared to an expected 0.2% increase. The measure was far better than December's 3.5% decline.
Materials stocks dragged on markets with Joy Global (JOY) one of the biggest laggards. The mining equipment maker tumbled 4.8% after reporting a 16% drop in quarterly revenue and earnings below forecasts. The Materials Select Sector SPDR ETF (XLB) dropped 0.53%.
Kroger (KR) jumped 7.5% after reporting fourth-quarter earnings of $1.04 a share, 14 cents higher than forecasts. Revenue grew 8.6% to $25.21 billion.
Apple (AAPL) reportedly delayed production of its 12.9-inch iPad to September due to supply issues with its display panels, according to Bloomberg. The company had previously expected to begin production in the first quarter. Shares dropped 1.6%.
Costco (COST) jumped 2.6% after earning $1.35 a share in its second quarter, 17 cents better than forecast. Comparable-store sales rose 4% in the U.S., while international comps increased 8%, excluding gas and foreign exchange pressures.
AbbVie (ABBV) won a bidding war for Pharmacyclics (PCYC), a cancer biotech company it will purchase for $21 billion in cash and stock. Johnson & Johnson (JNJ) was previously reported to have expressed interest. AbbVie shares sank 5.5%, while Pharmacyclics added 10.3%.
Abercrombie & Fitch (ANF) dropped 1.4% after shares were downgraded to "sell" from "hold" at Topeka Capital. The firm said the retailer's business turnaround was taking longer than expected.
Time Warner (TWX) climbed 0.4% after Deutsche Bank initiated shares with a "buy" and $100 price target. The firm said the media company would see revenue growth on the back of subscriptions and affiliate fees rather than advertising.
Las Vegas Sands (LVS) slid 1.1% after Nomura Securities said it expects a 25% decline in gaming revenue out of China's Macau gambling district over 2015, a key location for the company. Wynn Resorts (WYNN) and Melco Crown Entertainment (MPEL) were also lower.
Small-cap Callon Petroleum (CPE) tumbled 4% after reporting quarterly earnings of 5 cents a share, 2 cents less than expected. Revenue of $38.4 million came in less than an estimated $46 million.
European markets climbed after the ECB left rates unchanged at 0.5% and President Mario Draghi said the group now expects GDP to rise 1.5% over 2015 -- up from previous expectations of 1% -- and as high as 2.1% by 2017. Draghi also said the ECB will begin purchasing eurozone government bonds on March 9 under its $66 billion-a-month debt repurchase program.
After the markets close on Thursday, the Federal Reserve will post initial results of its annual stress tests on major banks, including Bank of America (BAC), Citigroup (C), JPMorgan Chase (JPM), and Goldman Sachs (GS).