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Wall Street pulled back from early gains as traders weighed a slew of earnings reports and mixed data on the U.S. economy.
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As of 3:30 p.m. ET, the Dow Jones Industrial Average fell 50 points, or 0.39%, to 12706, the S&P 500 slipped 11.1 points, or 0.84%, to 1315 and the Nasdaq Composite slumped 21.6 points, or 0.77%, to 2798.
A slew of blue-chip and other big-name companies reported earnings on the day.
AT&T (NYSE:T) posted a sizeable loss in the fourth quarter resulting from the break-up fee for its failed T-Mobile merger and a pension-related charge. Excluding the charges, its earnings on a per-share basis missed analysts' estimates by a penny. 3M (NYSE:MMM) unveiled a fourth-quarter profit of $1.35 per share on $7.1 billion in sales, versus estimates of $1.31 on $7.09 billion.
Caterpillar (NYSE:CAT) posted a fourth-quarter profit of $2.32 a share on $17.24 billion in revenue, compared to expectations of $1.73 on $16.05 billion. The world’s largest heavy machinery maker also said it sees its full-year 2012 profits hit $9.25 per share, beating estimates of $9.06.
There were also numerous key economic reports for traders to parse through.
Orders for long-lasting goods climbed 3% in December from November, topping estimates of a 2% gain. Excluding the transportation segment, orders rose 2.1%, beating estimates of a 0.7% gain and marking the biggest month-to-month jump since March 2011.
"With the strength in [Thursday's] report, we can say that the fourth quarter ended on a stronger note than many anticipated," Dan Greenhaus, Chief Global Strategist at BTIG wrote in a research note. "The bottom line is that based on this measure, albeit one that is quite volatile, the economy picked up a bit in December."
New claims for unemployment benefits rose to 377,000 last week from an upwardly revised 356,000 the week prior. Economists had expected claims to rise to 370,000 from an initial reading of 352,000. The four-week-moving average, which helps smooth out volatility in the weekly reports, fell by 2,000 to 378,000.
"The consistent downward movement in the four-week moving average indicates that the amount of involuntary job separations is continuing gradually to decline," Troy Davig, an economist at Barclays Capital wrote in a note to clients following the report.
Sales of new single-family homes in the U.S. fell for the first time in December since August. The Commerce Department reported sales fell 2.2% to an annualized rate of 307,000 units, short of the 320,000 economists expected.
Wall Street closed in the green on Wednesday following the Federal Reserve's vow to keep interest rates exceptionally low until 2014 and its hint that it may enact another round of quantitative easing. The afternoon rally pushed the Dow to its highest level since May, and the S&P 500 and Nasdaq to July highs. The Dow and S&P are both up more than 5% for the year, while the Nasdaq has soared 8.2% in January thus far.
Indeed, the move by the central bank helped traders overcome lingering anxiety about the debt crisis in Europe: "All concerns about sovereign debt are being put on the back burner," Manoj Ladwa, a senior trader at ETX Capital said in an interview with FOX Business on Thursday, noting the low interest rate environment has helped lift equity and risk markets.
On that front, debt negotiations in Greece dragged on for yet another day. Charles Dallara and Jean Lemierre, who represent private creditors, returned to Athens Thursday to attempt to strike a deal with the Greek government and its rescuers that has so far eluded those involved in the talks.
Commodities markets were broadly to the upside tracking weakness in the U.S. dollar, which recently fell 0.25% against a basket of six world currencies.
The benchmark crude oil contract traded in New York rose 30 cents, or 0.3%, to $99.70 a barrel. Wholesale RBOB gasoline climbed 0.45% to $2.847 a gallon.
In metals, gold jumped $29.80, or 1.8%, to $1,730 a troy ounce.
European blue chips rallied 1.3%, the English FTSE 100 climbed 0.98% to 5,779 and the German DAX soared 1.5% to 6,520.
In Asia, the Japanese Nikkei fell 0.39% to 8,849 and the Chinese Hang Seng jumped 1.6% to 20,439.
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