Financial markets paused on Thursday ahead of a key employment report scheduled for release before the start of trading on Friday.
The Dow Jones Industrial Average, up 475 points in the previous two sessions, fell 21.19 points to 13,391.36. The Nasdaq Composite Index dropped 11.69 points to 3,100.57, and the S&P 500 Stock Index was down 3.05 points to 1,459.37.
Stocks were held in a narrow range following the release of minutes from the December meeting of the Federal Reserve's Open Market Committee. The monetary panel suggested it has limited tools available to support the economy and will possibly end its bond buyback program by the end of 2013.
Gold fell on Thursday after rising in the three previous sessions, closing at $1,674.60 an ounce, down $14.20. Oil slipped 20 cents to $92.92 a barrel.
Family Dollar Stores Inc. (NYSE: FDO) tumbled 13 percent after forecasting second-quarter earnings that missed estimates. UnitedHealth Group Inc. (NYSE: UNH) sank 4.7 percent after the biggest U.S. health insurer was cut to "hold" from "buy" at Deutsche Bank AG (NYSE: DB). Ross Stores Inc. (Nasdaq: ROST) and TJX Cos. (NYSE: TJX) jumped at least 3.3 percent as consumer-discretionary companies rallied amid same-store sales that topped estimates.
The S&P 500 surged 2.5 percent Wednesday, the most since December 2011, as lawmakers passed a bill averting spending cuts and tax increases scheduled to come into effect this year. The index on Thursday climbed within one point of its highest closing level in five years before retreating.
After this week’s deal to avoid the so-called fiscal cliff, investors are turning their attention to impending confrontations between congressional Republicans and the White House over spending.
Lawmakers may need to approve an increase in the $16.4 trillion debt ceiling as early as mid-February, with Republicans planning to use the vote to force President Barack Obama to accept cuts in entitlement programs such as Medicare. Another showdown might emerge in early March, when Congress must confront the $110 billion in automatic spending cuts that were put off in the Jan. 1 tax deal.
The budget agreement passed by Congress on Tuesday won’t lower the country’s deficit enough to avoid a sovereign-rating downgrade, Moody’s Investors Service said Wednesday. Moody’s, which has assigned its top AAA ranking for the United States, has a negative outlook on the world’s biggest economy, as does Fitch Ratings.
Equities gained earlier Thursday after a private report showed companies added 215,000 workers in December. The increase was higher than projected, data from the Roseland, N.J.-based ADP Research Institute showed Thursday. The median forecast of 36 economists surveyed by Bloomberg called for an advance of 140,000. The official government report will be released on Friday.
More Americans than forecast filed claims for unemployment insurance payments last week as the closing of some state agencies during the holidays prompted the government to estimate some figures.
The Labor Department will release its payrolls report for December on Friday. The median forecast of economists in a Bloomberg survey projects a gain of 150,000 workers, following an increase of 146,000 in November. The unemployment rate held at 7.7 percent, the lowest since December 2008, according to economists’ estimates.
“This is a funny day because it’s in between the payroll number Friday and Wednesday’s announcement on the fiscal cliff,” said Christopher Orndorff, who helps oversee $450 billion as senior portfolio manager at Western Asset Management Co. in Pasadena, Calif. “People are still trying to digest the news from Wednesday and the implications of what may come with the debt limit negotiations that are going to be ongoing for the next two months, and looking forward to Friday’s employment report.”
Biogen Idec Inc. (Nasdaq: BIIB) declined 1.4 percent to $147.86. The company said its experimental drug for amyotrophic lateral sclerosis failed to help patients in a clinical trial. The drug, dexpramipexole, was in the third and final stages of clinical trials generally required for approval.
General Growth Properties Inc. (NYSE: GGP) slid 2.9 percent to $19.46 after Pershing Square Capital Management LP gave up its demand for the sale of the company. GGP’s biggest investor, Brookfield Asset Management Inc. (NYSE: BAM), will buy warrants for 18.4 million shares of the mall owner from Pershing, according to a statement Thursday.