By Victor Reklaitis, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks leaned lower on Thursday,
putting the S&P 500 and Dow Jones Industrial Average on pace
for a fifth straight down day, as better-than-expected readings on
employment and economic growth boosted bets that a stimulus
reduction could come this month.
Atlanta Federal Reserve President Dennis Lockhart said a
tapering for the Federal Reserve's bond-buying program that has
supported equities should be "on the table" this month.
"The combined effect of these three developments has sent U.S.
indices and gold into another tailspin," said Colin Cieszynski,
senior analyst at CMC Markets, in emailed comments. He was
referring to the news regarding employment, economic growth and
Lockhart's comments.
The S&P 500 (SPX) was last down 5 points, or 0.3%, to 1,788,
while the Dow(DJI) slipped 44 points, or 0.3%, to 15,846 after
briefly turning positive.
The Nasdaq Composite(RIXF) was roughly unchanged at 4,038. The
tech-heavy index outperformed the other main indexes on Thursday
thanks in part to Apple Inc.'s (AAPL) 1.1% gain on news that China
Mobile Ltd.(CHL) has signed a deal to offer iPhones on its
network.
On Wednesday, the S&P 500 and Dow endured their fourth
straight down day, but the Nasdaq edged up, as upbeat economic
reports reinforced Fed taper worries. While an improving economy
helps the market over the longer run, encouraging data can weigh on
stocks as traders worry the central bank could act soon to pare
back its bond buys. Strategists have said the market simply has
been due for a pullback after a year-to-date gain of more than 25%
for the S&P 500.
The week's most significant economic report is expected Friday,
when the government releases its monthly jobs report. Economists
polled by MarketWatch anticipate the U.S. economy added 180,000
jobs in November, but some forecasts may be rising given recent
encouraging data.
"We're likely to hear 'whisper numbers' closer to 200,000 today
and tomorrow," said Chris Weston, chief market strategist at IG, in
an emailed note. Follow MarketWatch's live blog of Thursday's
stock-market action.
* Today's market-moving news: The Labor Department said the
number of new applications for unemployment benefits fell by 23,000
last week to 298,000, better than forecasts for a rise to 325,000.
The Commerce Department said the U.S. economy expanded at a 3.6%
annual pace in the third quarter, topping expectations for 3.2%
growth. Lockhart did not say whether he supported a move to taper
at the next Fed meeting on Dec. 17-18, but he said market
expectations that the asset-purchase program will be wound down
over the coming year were "reasonable."
* Today's movers & shakers: Shares in General Growth
Properties Inc. jumped 3.4% following news late Wednesday that the
operator of shopping malls will join the S&P 500. Dollar
General Corp. advanced 4.8% following its better-than-expected
quarterly profit and raised guidance. Read more in the Movers &
Shakers column.
* Other markets:European stocks traded broadly lower after
strong U.S. growth data stirred tapering fears and as European
Central Bank President Mario Draghi addressed the state of the
euro-zone economy. Asian equities finished down, with Australia and
Japan among the worst performers. Gold futures fell sharply, while
crude oil rose and the dollar saw gains fade.
* The buzz: A recent sharp rise in the so-called fear gauge is
likely to be short-lived, so there's still room for a Santa Claus
rally, says a post at The Wall Street Journal's MoneyBeat blog. A
contributor to MarketWatch's Trading Deck is also sounding bullish,
saying the market has significant support because of the tax
implications of selling now.
More news from MarketWatch:
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What bubble? Corporate profits reach new record as share of
GDP
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