Stocks snapped their winning streak Thursday as investors took a breather after bidding up stocks to new highs for the year earlier in the week.
The Dow Jones Industrial Average lost 7.8 points, or 0.1 percent, to close at 9,783.92. The S&P 500 and Nasdaq each lost about 0.3 percent.
Stocks had started the day out weak, then got a pop from an encouraging Philadelphia Fed report, before giving up gains in a session that went down to the wire.
General Electric, which have rallied through key levels this week, started the day at the top of the Dow pack, then tumbled to the bottom before ending down just 1.4 percent at $16.66. The market buzz is that Vivendi Universal — not only isn't likely to buy NBC Universal, but — may sell its stakein the unit, which is the parent of CNBC.
Travelers, Alcoa and Verizon were the bottom three, in terms of percentage decline, on the Dow.
There were industrials and financials at the top of the Dow pack once again — Caterpillar, Bank of America and Coca-Cola — but financials started to lose their grip and American Express actually ended near the bottom of the pack.
FedEx shares skidded 2.2 percent after the economic bellwether reported earnings in line with estimates but said revenue fell 27 percent and fuel costs took a toll on earnings. The package-delivery giant also said it will raise rates by about 6 percent.
In the day's economic news, the Philadelphia Fed said its manufacturing gauge rose to 14.1in September from 4.2 in August, registering its first back-to-back monthly gain since October and November of last year.
Initial jobless claims unexpectedly fell last week, dropping by 5,000, but the number of people remaining on benefit payrolls continued to rise.
Some homebuilders rallied after a report showed housing starts and permits rose in August to their highest level since November amid an increase in multifamily homes.
Hovnanian and Beazer each gained more than 5 percent.
Kodak shares tumbled more than 11 percent after the imaging company said it plans to raise $700 million, including a commitment from private-equity firm Kohlberg Kravis Roberts, to boost its balance sheet and free up cash for investments.
Oracle shares dragged on the Nasdaq. The stock lost 3.3 percent after the software maker hit its earnings target in a report after the bell Wednesday but sales fell short of expectationsas businesses remain a little gunshy on tech spending.
Palm shares fell 1.5 percent ahead of its earnings, which came after the closing bell.
Palm shares jumped Thursday as the company reported a narrower loss than expected and announced an offering of common stock.
Citigroup shares rallied once again, climbing another 5.2 percent. The stock started to bounce back Wednesday after a sharp selloff in the previous session following news that the government may withdraw some of its 34-percent stake in the firm and that Citi might launch a $5 billion secondary offering.
US Bancorp shed 1.7 percent despite an upgrade. Rochdale analyst Dick Bove raised his rating on the stock to "buy" from "neutral," saying the bank could gain market share from struggling competitors.
"Competitors are weakening as they deal with loan problems. This is creating a vacuum in the market allowing banks with bold programs to grab market share," Bove wrote in a note to clients.
Airlines have started to take off, with many up 20 to 60 percent this month, as fundamentals are starting to improve.
Shares of American Airlines' parent, AMR jumped 20 percent today after the company said it has raised $2.9 billion and will focus on its most profitable routes. Though other airlines pulled back a bit today amid some profit-taking.
Immunogen said it licensed its technology to develop anticancer drugs to Amgen. Immunogen will get a $1 million payment up front and milestone payments of up to $34 million on future royalties. Immunogen rose 3.5 percent, while Amgen gained 1.4 percent.
Elsewhere, Synovus shares dropped 12 percent The Columbus, Ga., bank-holding company priced a public stock offering at $4 a share and expects proceeds of $600 million, nearly double an estimate from earlier this week.
Asian stocks closed broadly higher with Chinese, Japanese and Hong Kong stocks surging ahead. European stocks closed at an 11-month high for a second-straight day.
Gold pulled back, settling around $1,013.50 an ounce, after earlier hitting an 18-month high above $1,025. But many analysts think investors were just taking a breather and that weakness in the dollar will continue to underpin gold's rally.
Crude oil was little changed, settling down 4 cents at $72.47 a barrel, amid worries about energy demand.
Volume was slightly above average, with 1.52 billion shares changing hands on the New York Stock Exchange. Decliners outpaced advancers, roughly 17 to 13.
Friday is quadruple witching, meaning four key expirations — stock index futures and options, and stock futures and options — which is likely to put some volatility into the market. For much of the week, the CBOE volatility index has held below 24.
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