U.S. stocks closed lower on Thursday, with the Dow industrials and S&P 500 extending losses into a fifth day, after data had the economy growing more rapidly than expected, adding to thoughts that the Federal Reserve would begin to reduce stimulus sooner than speculated.
"Unless something kills this economy, the Fed has to taper," said David Kelly, chief market strategist at J.P. Morgan Funds.
Friday's nonfarm payrolls report could have the unemployment rate falling from 7.3 percent, Kelly said. "We could see a rate as low as 7.0 percent. If that happens, it's going to put further pressure on the Fed to begin unwinding this program, and further increases the odds that it happens at the January meeting," he added.
"If I were a bookmaker at the Fed race track setting odds, the odds-on favorite is January, followed by December, with March the long odds," said Kelly, whose point of view differs from the March estimate offered by many.
Apple climbed as China Mobile stepped nearer to offering its subscribers iPhones. Aeropostale fell after the retailer reported a larger fourth-quarter loss than Wall Street expected. Safeway declined after Jana partners reduced its holdings in the grocery chain.