Dow Pares Loss to 0.5%; Coke, Palm Fall

Stocks posted modest losses Thursday as investors found some buying opportunities after an earlier selloff triggered by the jobless report and worries about Greece.

The Dow Jones Industrial Average lost just 53.13, or 0.5 percent, after being down more than 180 points earlier. Coca-Cola and DuPont led Dow decliners.

Alcoa and Bank of America were among the handful of Dow gainers.

The S&P 500 lost just 0.2 percent and the Nasdaq fell just 0.1 percent.

The CBOE volatility indexhad been pushing higher for much of the day but ended down slightly at 20.10.

The last of the week's Treasury auctions, for 7-year notes, was met with decent demand: The high yield was 3.078 percent and the bid-to-cover ratio was 2.98 percent.

Initial jobless claims rose by 22,000, much more than expected. Though the government said some of the increase could have been due to a backlog of claims processing due to inclement East Coast weather.

"It's easy to get caught up in the short-term details of these [jobless] numbers but the fact is that the downward trend has leveled-off over the past couple of months," Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote in a note to clients. "This might yet prove to be noise but we have to be on alert to the idea that the pace of layoffs might have stopped falling for a reason — smaller firms are still suffering badly from the credit crunch."

Orders for durable goods, big-ticket items such as cars and refrigerators, fell 0.6 percent in January; economists had been expecting a 1-percent increase. And mortgage rates ticked higher this week: The average on the 30-year fixed rose to 5.05 percent from 4.93 percent last week.

There was more buzz about Greece today: Ratings agencies indicated they may downgrade Greece's debt, raising concerns about potential defaults and the cost of a bailout.

Meanwhile, Fed Chairman Ben Bernanke said the central bank will investigate traders betting against Greece with credit-default swaps.

"We are looking into a number of questions related to Goldman Sachs and other companies in their derivatives arrangements with Greece," Bernanke said in response to a question from U.S. Senate banking Committee Chairman Sen. Christopher Dodd.

A New York Times article this morning pointed out that this echoed the kind of trades that nearly brought down AIG.

Coca-Cola Enterprises was the biggest gainer on the S&P 500, surging over 30 percent, following news that the bottler will be purchased by Coca-Cola. The news wasn't so good for Coca-Cola, which was the biggest percentage decliner on the Dow.

The real winner of the Coke-bottling dealmay be Dr Pepper Snapple Group , which is set to reap as much as $1 billion in licensing fees from Coke if the deal goes through. Its shares jumped 11 percent.

Palm shares tumbled about 20 percent after the gadget maker slashed its revenue forecast.

Apple rose 0.7 percent amid a couple of rumors swirling about the company: That it might be planning a 4-for-1 stock split and it may add an "explicit" category to its app store to separate adult content.

Most retailers were lower, as the cold weather has crimped demand for spring merchandise. But Kohl's rose nearly 5 percent after the department-store operator beat earnings expectations.

Cablevision shares rose over 3 percent after the cable operator posted a profit, helped by bigger increases in Internet and phone subscribers than expected, as well as cost-cutting measures.

GameStop shares fell more than 7 percent after the videogame maker's CFO abruptly resignedafter just six months.

The major averages appear virtually certain to chalk up gains for the month of February, but a third week of gains for the Dow and the S&P 500 and a fourth week of gains for the Nasdaq is still in doubt.

Still to Come:

FRIDAY: 2nd read on Q4 GDP; consumer sentiment; existing-home sales; Fed's Kocherlakota speaks; Madoff hearing; Earnings from Berkshire Hathaway

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