U.S. stocks slid on Thursday after mixed economic reports cast a favorable light on the labor market while also illustrating the economy expanded less than economists expected at the end of last year.
"A lot of the macro data points are firming and confirm the January-February slowdown was weather related. The counter headwind is that investor sentiment is pretty elevated, and we would view that as a contrary indicator," said Jim Russell, senior equity strategist for US Bank Wealth Management.
"The markets are likely to trade sideways to slightly negative over the next few trading sessions as some of the pre-announcements from companies indicate the first quarter is going to be pretty weak," said Russell, who adds the process in play "sets us up for lowered expectations, takes a little positive sentiment out of the market, and if we're lucky in two to three weeks we can resume with an upward bias."
The market volatility is "typical of a market that remains at the higher end of the range, and when you wind down a quarter," said Peter Cardillo, chief market economist at Rockwell Global Capital.
The S&P 500 dropped 3.52 points, or 0.2 percent, to 1,849.04, with energy pacing gains and financials hardest hit among its 10 major sectors.
The Nasdaq Composite slid 22.35 points, or 0.5 percent, to 4,151.23.
"We've had real weakness in the Nasdaq this week, what we're witnessing here is institutions getting out of the momentum stocks, the high flyers," said Cardillo of the recent flight from more speculative plays.
King Digital Entertainment fell 2.7 percent, a day after the mobile-game maker's disappointing debut as a public company.
Advancers pulled just ahead of decliners on the New York Stock Exchange, where 793 million shares traded. Composite volume surpassed 3.7 billion.
The dollar edged higher against the currencies of major U.S. trading partners; the yield on the 10-year Treasury note used in figuring mortgage rates and consumer loans fell 1 basis point to 2.679 percent.
Falling under $1,300 for the first time since the middle of last month, gold futures shed $8.70, or 0.6 percent, to close at $1,294.70 an ounce, while oil added $1.02, or 1 percent, to $101.28 a barrel.
"That shows up right at the gas pump; Any time oil is $100 or more, that represents a bit of a headwind to the consumer," said Russell at US Bank Wealth Management.
The Commerce Department reported gross domestic product grew 2.6 percent in the final three months of last year, better than the 2.4 percent rate projected in February, but just below the 2.7 percent estimated by economists.
"The revision in Q4 was a little less than we were looking for, but there were bright spots in there," said Rockwell Global Capital's Cardillo, referring to increased consumer spending as a positive aspect to the report.
Separately, numbers from the Labor Department had jobless claims falling by 10,000 to 3111,000, a level that has it at a near four-month low.
"Today's employment numbers suggest we're headed for a nice bounce in the labor market," said Cardillo.
"Next week we're going to have a rather interesting employment report. It's probably the first one in several months where we don't have any external factors attached to it, and obviously I'm talking about the weather," Cardillo added.
And, the National Association of Realtors reported pending home sales fell for an eighth month in February, with sales down 10.5 percent from a year ago.
"We are about to face the all-important spring selling season which makes up about half of annual sales. With private equity reducing the pace of their purchases, the first-time home buyer is needed in a greater way in order to see a substantive pick up in home buying," Peter Boockvar, chief market analyst, the Lindsey Group, emailed.
On Wednesday, stocks closed at or near session lows on heightened Ukraine worries.
"The Ukraine situation, while not a major negative impact today is certainly on the back burner," added Cardillo of the geopolitical tensions and sanctions that have followed Russia's annexation of Crimea in Ukraine.
—By CNBC's Kate Gibson
Coming Up This Week:
9:30 p.m.: Fed's Evans speaks
8:30 a.m.: Personal income and consumer spending for February
9:55 a.m.: University of Michigan/Reuters consumer sentiment for March
1:15 p.m.: Fed's George speaks
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