U.S. stocks edged lower on Thursday, as investors discounted weaker-than-expected data on consumer spending and the labour market, but a disappointing outlook by Cisco Systems weighed on each of the major indexes.
Cisco fell 4.5 per cent to $21.85 as one of the top drags on all three major U.S. indexes after the network-gear maker forecast a drop of 6 to 8 per cent in revenue in the current quarter.
Indexes managed to recover from initial lows and pull to near the unchanged mark as investors looked past soft data on the consumer and labour market due to harsh weather conditions.
Initial claims for state unemployment benefits rose last week and retail sales fell in January, while December retail sales were also revised lower.
“Certainly, weather affected retail sales in January and we would expect it again in February,” said Kate Warne, investment strategist at Edward Jones in St. Louis.
“Yes, they were disappointing but nobody is sure whether it is a real slowdown or just due to the weather.”
Comcast said it would buy Time Warner Cable for $45.2bn in an all-stock deal that combines the two largest U.S. cable operators.
Time Warner shares rose 6.9 per cent to $144.58 while Comcast shed 3.9 per cent to $53.05. Shares of Charter Communications, which had also pursued Time Warner, fell 6.8 per cent to $128.24.
The Dow Jones industrial average fell 38.23 points or 0.24 per cent, to 15,925.71, the S&P 500 lost 2.2 points or 0.12 per cent, to 1,817.06 and the Nasdaq Composite added 4.853 points or 0.12 per cent, to 4,206.141.
A scheduled hearing by Federal Reserve Chair Janet Yellen in front of the U.S. Senate Banking Committee on Thursday was postponed due to the snowstorm in the U.S. East Coast. Yellen’s testimony on Tuesday helped fuel strong gains on Wall Street.
Whole Foods Market lost 8.5 per cent to $50.76 after the largest U.S. organic and natural food retailer stunned investors on Wednesday by cutting its 2014 sales forecast for the second time in three months.
Goodyear jumped 8.3 per cent to $26.17 after one of the world’s largest tire companies posted a higher-than-expected fourth-quarter profit and said it had fully funded its hourly U.S. pension plan.
Of 382 companies in the S&P 500 that reported earnings through Thursday morning, 67.5 per cent beat profit expectations, above the 63 per cent average since 1994 and slightly above the 67 per cent rate for the past four quarters, according to Thomson Reuters data.
Avon shed 1.6 per cent to $14.82 after it posted fourth-quarter results and said it may cost as much as $132m to settle a U.S. bribery investigation into the beauty products company’s efforts to develop new markets overseas.
