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Stocks close mixed ahead of data; geopolitics in backseat

Stocks cut losses to close mixed on Thursday as geopolitical tensions lingered ahead of consumer data.

"I think tomorrow will be focused on economic data unless something happens overnight," Mark Luschini, chief investment officer at Janney Montgomery Scott, said.

Boosted by low oil prices, transports also gained and helped stocks turn positive.

"The transports are leading the market higher and utilities as well," Peter Cardillo, chief market economist at Rockwell Global Capital, said. "The market—although it's going through some sort of technical adjustments—is still showing a lot of strength."

"With oil prices coming down, obviously transports are favored," he said.

Earlier, stocks had fallen with a slide in oil prices, but later shaved those losses with a slight rebound in oil. Brent rose slightly from its 17-month low of below $98 a barrel, while U.S. crude gained to trade above $92 a barrel. In late morning trade, energy was still among the hardest hit sectors on the S&P 500, which was down for the sixth time in eight sessions. Natural gas inventories rose more than expected.

Read MoreOil demand growth slips to 'remarkable' 2½-year low

"On the whole we continue to be in a 'hand-and-glove' relationship with commodities," Art Hogan, chief market strategist at Wunderlich Securities, said. "If we can get any resolution in any of the geopolitical stories, then this market will find a focus to the upside."

Investors kept an eye on the world economy with Thursday's reports that the United States and its European Union allies would increase their sanctions against Russia and President Barack Obama's announcement on Wednesday evening of new plans to fight Islamic State militants.

Biotech firms also weighed on markets, as Celgene and Vertex Pharamceuticals each declined more than 2 percent, bringing the health care sector lower on the S&P 500.

"The weakness that we're seeing in biotechs is because they've had a pretty strong run," Bruce McCain, chief investment strategist at Key Private Bank, said. "The stocks have gotten vulnerable."

U.S. stock index futures had pointed to a lower open on Wall Street after Obama's speech and jobless claims for the week came in higher than expected.

"Tonight, with a new Iraqi government in place, and following consultations with allies abroad and Congress at home, I can announce that America will lead a broad coalition to roll back this terrorist threat," Obama said on Wednesday evening.

The news came amid heightened nerves over terrorism in the U.S. on the 13-year anniversary of 9/11.

Traders work on the floor of the New York Stock Exchange in New York.
Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange in New York.

"Well, we're going to war again," Dan Veru, chief investment officer at Palisade Capital Management, said. "This is creating uncertainty. At least in the short term this might weigh on the market."

McCain and other analysts were also concerned with the international impact of shifts in the value of the U.S. dollar but were generally optimistic on the overall economic strength of the nation.

Initial claims for state unemployment benefits increased 11,000 to a seasonally adjusted 315,000 for the week ended September 6, the highest level since June, the Labor Department said on Thursday. However, claims remained near pre-recession levels and did not indicate a significant change in labor market conditions.

Chinese inflation data also showed some indication that the world's second-largest economy was losing steam.

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Traders are looking ahead to Friday's data, which includes retail sales and consumer sentiment.

The numbers may likely be weak, Jack Ablin, executive vice president at BMO Private Bank, said."The opportunity cost of spending money has gotten expensive as having money in the stock market is better [now]."

Next week, investors will turn their focus to the Federal Reserve meeting and other political events.

Read MoreA Fed phrase change could mean rate hikes sooner

"The market is in a quiet phase ahead of the Fed next week and the Scotland, UK vote," Peter Boockvar, chief market analyst at The Lindsey Group. "The market's just very reactive, not proactive, which makes it hard to trade."

Stocks rose on Wednesday as technology shares rallied on the back of 3.1 percent rebound in Apple. The S&P 500 finished the day at 1,995, up seven, while Nasdaq climbed 0.8 percent to 4,586.

Symbol
Name
Price
 
Change
%Change
DJIA
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S&P 500
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NASDAQ
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The Dow Jones Industrial Average closed down 19.7 points, or 0.12 percent, at 17,049.00, with Visa the greatest decliners and Cisco and JPMorgan Chase leading the 14 blue-chip gainers.

The S&P 500 reversed losses to close up 1.76 points, or 0.09 percent, at 1,997.45, with health care leading three decliners and utilities the greatest advancer among the ten sectors.

The Nasdaq also turned positive in the close, up 5.28 points, or 0.12 percent, at 4,591.81.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 13.

Four stocks advanced for every three decliners on the New York Stock Exchange, with an exchange volume of 603 million and a composite volume of 2.9 billion.

The benchmark 10-year Treasury note yield rose to 2.56 percent from 2.52 percent earlier. The U.S. dollar edged higher against major world currencies.

On the New York Mercantile Exchange, crude oil futures for October delivery closed up $1.16 to $92.83 a barrel, while gold futures fell $6.30 to $1,239 an ounce.

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In corporate news, Lululemon rose 16 percent after the yogawear maker said it earned 33 cents per share for the second quarter, beating estimates by four cents, with revenue also beating estimates. Same-store sales did fall, but not as much as analysts were forecasting.

RadioShack rose 10 percent despite the company reporting a loss that was twice as large as expected, with revenue also well below estimates on a 20 percent drop in same-store sales. The stock has lost 95 percent of its value over the past decade, but RadioShack said it is exploring a variety of strategic alternatives including a possible sale.

JDS Uniphase gained as much as 12 percent on news the firm is splitting itself into two separate publicly traded companies by spinning off its communications and commercial optical products business to shareholders.

Twitter announced its first debt sale, aiming to raise as much as $1.5 billion through a sale of convertible notes.

Macy's was downgraded to "neutral" from "buy" at Sterne Agee, which points to a fair valuation amid a slowing in same-store sales.

Yum Brands–the parent of KFC, Pizza Hut, and Taco Bell—raised its quarterly dividend by 11 percent, increasing the payout by four cents to 41 cents per share.

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Taminco rose after the specialty chemical maker was offered $2.8 billion in cash, or $26 a share, by competitor Eastman Chemical.

Vail Resorts spiked on news the firm will acquire Park City Mountain Resort for $182.5 million.

On tap this week:

Friday

Earnings: Darden Restaurants

8:30 a.m.: Retail sales

8:30 a.m.: Import/export prices

9:55 a.m.: Consumer sentiment

10:00 a.m.: Business inventories

—By CNBC's Evelyn Cheng. CNBC's Peter Schacknow and Rich Fisherman contributed to this report.

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