By Wallace Witkowski and Polya Lesova, MarketWatch
SAN FRANCISCO (MarketWatch) -- U.S. stocks pared losses
Thursday, as investors mulled mixed economic data, including a
decline in U.S. weekly jobless claims and contractions in the
Japanese and euro-zone economies in the fourth quarter.
U.S. jobless claims dropped by 27,000 to 341,000 in the week
ended Feb. 9, according to the Labor Department. Economists
surveyed by MarketWatch expected a much smaller drop.
"Overall the feel is that the labor market is improving as
evidenced by a dip in the number of insured claims amongst
claimants, which eased to 2.4% from 2.5%," said Andrew Wilkinson,
chief economic strategist at Miller Tabak, in emailed comments.
"This measure tracks the national rate of unemployment and portends
further declines ahead."
International economic news, however, was bleak. Gross domestic
product in the 17-nation euro-zone contracted by 0.6% compared with
the third quarter and fell 0.9% from the fourth quarter of 2011,
the European Union statistics agency, Eurostat, reported
Thursday.
And in Japan, real GDP shrank at an annualized rate of 0.4% in
the October-December quarter from the preceding three months, with
the result countering expectations for growth in GDP.
The Dow Jones Industrial Average (DJI) slipped 7.14 points, or
less than 0.1%, to 13,975.77, with 19 out of 30 components
declining. The Dow had been down as much as 0.4% earlier in the
session.
The index was led lower by Cisco Systems Inc. (CSCO) whose
shares dropped 1.3%. Cisco late Wednesday reported a small gain in
earnings for its fiscal second quarter.
The S&P 500 index (SPX) declined 1.12 points, or less than
0.1%, to 1,519.21, after being down as much as 0.4% earlier.
Telecom stocks were the biggest decliner and consumer staples led
gains among the benchmark's 10 major industries.
The Nasdaq Composite Index (RIXF) fell 2.33 points, or less than
0.1%, to 3,194.55, after being down as much as 0.5% earlier.
CenturyLink Inc. was the largest decliner in the S&P 500.
Its shares (CTL) dropped more than 19% after the landline provider
slashed its dividend and authorized a $2 billion stock buyback
plan. The moves triggered negative actions from rating
agencies.
In the consumer-staples sector, Constellation Brands Inc. (STZ)
shares surged more than 37%. Beer giant Anheuser-Busch InBev NV
(AHBIY) and Constellation said they've agreed on new terms for AB
InBev's full divestiture of the U.S. assets of Mexico's Grupo
Modelo SAB de CV.
In other deal news, H.J. Heinz Co. (HNZ), the food company known
for its ketchup, agreed to be acquired by Warren Buffett's
Berkshire Hathaway Inc. (BRKA) (BRK/A) and 3G Capital in a deal
valued at $28 billion, including debt. Heinz shareholders will
receive $72.50 per share in cash, a 20% premium to Heinz's closing
price of $60.48 on Wednesday. Shares of Heinz rallied 20%.
In the airline sector, the parent of American Airlines, AMR
Corp. (AAMRQ) and US Airways Group Inc. (LCC) confirmed plans to
merge and create the world's biggest air carrier. US Airways shares
declined nearly 6%.
Nick Beecroft, senior market analyst at Saxo Capital Markets,
said weak European growth was contributing to weaker sentiment and
the market was also a little unnerved by "brewing discontent about
currency wars."
The Wall Street Journal reported that George Soros and other
hedge-fund managers are making huge profits by betting on a weaker
yen.
The dollar index (DXY), which tracks the performance of the
greenback against a basket of other major currencies, rose to
80.494 from 80.091 late Wednesday. The euro (EURUSD) dropped to
$1.3332 from $1.3446.
Treasurys rose, with the yield on the 10-year note (10_YEAR)
down 2 basis points to 2.04%.
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