By Anora Mahmudova and Carla Mozee, MarketWatch
NEW YORK (MarketWatch) -- The optimism that sent indexes to new
intraday highs after the European Central Bank's surprise
interest-rate cuts Thursday had fizzled out by the end of the
session, as indexes dipped into the red.
Analysts said that markets were overextended after a big run-up
over the past four weeks, which made the S&P 500's and Dow
Jones Industrial Average's pullback Thursday afternoon
unsurprising. The modest retreat comes as investors await the
monthly jobs report set to be released on Friday.
Both indexes reached intraday highs late Thursday morning after
the ECB moves, but their gains faded as the session wore on.
The S&P 500 (SPX) lost 3 points, or 0.2% to 1,997.60. The
Dow Jones Industrial Average (DJI) closed down 8.8 points, or 0.1%,
at 17,069. The Nasdaq Composite (RIXF) fell 10.3 points, or 0.2%,
to 4,562.20.
Market-moving economic news: The European Central Bank
unexpectedly lowered key interest rates. Also read: The reluctant
firefighters at the ECB start dousing the flames.
In the U.S., the day's economic data painted a picture of
continued economic growth. The ADP report on hiring in the private
sector showed private-sector hiring was almost unchanged from July.
Weekly jobless claims numbers rose slightly more than expected, but
remained near an eight-year low. Meanwhile, a gauge of activity for
U.S. services and other nonmanufacturing companies reached its
highest rate since 2008.
Those reports are merely a prelude to the closely-watched August
jobs report on Friday. Economists on average are forecasting that
.
On the Fed watch, Cleveland Federal Reserve President Loretta
Mester argued the Fed should rework its forward guidance to convey
that the first rate increase will depend on economic conditions and
the speed of its progress toward the Fed's twin goals of low
unemployment and stable prices. The Fed will debate the wording of
its forward guidance at its next policy committee meeting on Sept.
16-17. Mester is a voting member this year.
Stocks to Watch:
PVH Corp.(PVH) shares jumped 9% after the owner of the Calvin
Klein and Tommy Hilfiger brands reported second-quarter earnings
beat expectations Wednesday.
GoPro Inc.(GPRO) shares dropped 6.7% after J.P. Morgan Chase
downgraded the stock to neutral, citing its valuation. (Read more
about the day's notable stock moves here:
http://www.marketwatch.com/story/tesla-picks-nevada-for-battery-plant-gannett-announces-layoffs-2014-09-04.)
Other markets: European stocks closed higher after the ECB
decision. Asian stocks ended mixed, with the Nikkei Average in
Tokyo down by 0.3%.
The euro (EURUSD) fell below $1.30 to a 14-month low against the
dollar after the surprise ECB move.
Oil futures (CLV4) and gold futures (GCZ4) fell.
Victor Reklaitis contributed to this report.
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