(By Balachander) U.S. stocks ended in red, reversing early gains - as the sweeping set of spending cuts - known as sequestration, are set to go into effect beginning Friday. Investors also weighed a lower-than-expected GDP report that offset a set of positive data on jobless claims and business activity.
The S&P 500 Index shed 0.09 percent to end at 1,514.67. The Dow Jones fell 0.15 percent to finish at 14,054.79. The Nasdaq Composite Index edged 0.07 percent lower to close at 3,160.19.
The U.S. Senate failed to pass both Republican and Democratic bills aimed to to avoid the sequestration, reports said.
A report from the Bureau of Economic Analysis showed U.S. GDP grew at an annual rate of 0.1 percent in the fourth quarter from a contraction of 0.1 percent initially estimated last month. Expectations, though, were for a growth of 0.5 percent.
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The number of Americans who continued to receive jobless benefits dropped more than forecast last week, a government data showed. Jobless claims declined 22,000 to 344,000 for the week ended Feb. 23 from a revised 366,000, while economists projected 360,000 applications.
Meanwhile, Chicago-area purchasing managers' index for January rose to its highest level in almost a year to 56.8 in February from 55.6 in January, also topping expectations of a reading of 54.3.
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J.C. Penney Company Inc. (NYSE: JCP) tumbled 16.97 percent after the department store chain posted a quarterly loss as sales plunged and margins contracted sharply.
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Herbalife Ltd. (NYSE: HLF) surged 7.61 percent after the nutritional supplements company agreed with Carl Icahn to increase the size of its board and nominate two representatives chosen by the activist investor.
Groupon Inc. (NASDAQ: GRPN) plunged 24.28 percent after the daily deal website posted a quarterly loss and gave a downbeat revenue forecast.
Sears Holdings Corp. (NASDAQ: SHLD) lost 5.20 percent after the retailer announced a fourth-quarter loss amid lower revenue. Domestic comparable store sales fell 1.6 percent.
Cablevision Systems Corp. (NYSE: CVC) plunged 9.57 percent after the company posted a decline in fourth-quarter revenue and customer base following superstorm Sandy.
Molycorp Inc. (NYSE: MCP) fell 1.60 percent after the rare earth oxide (REO) producer delayed its 10-K filing over an impairment charge to be recorded for the fourth quarter.
Pandora Media Inc. (NYSE: P) shed 4.24 percent after the Internet radio company said it will introduce a 40-hour per month limit on free mobile listening.
Barnes & Noble Inc. (NYSE: BKS) gained 3.35 percent. Some investors are likely hopeful that Chairman Leonard Riggio's potential bid for the retail business will succeed, the Wall Street Journal reported.
FARO Technologies Inc. (NASDAQ: FARO) surged 17.64 percent after the developer of imaging systems posted an unexpected revenue growth.
European markets closed higher, with Germany's DAX up 0.86 percent to close at 7,741.70. France's CAC40 added 0.85 percent to finish at 3,723. The U.K.'s FTSE 100 rose 0.55 percent to end at 6,360.81.
Among Asian markets, the Shanghai Composite Index rose 2.26 percent to end at $2,365.59. Japan's Nikkei 225 climbed 2.71 percent to end at 11,559.36. Hong Kong's Hang Seng Index added 1.96 percent to close at 23,020.27. India's Sensex closed at 18,861.54, down 1.52 percent.
Commodity & Currency Scan
Crude oil futures fell 0.93 percent to $91.91 per barrel, while natural gas futures jumped 1.51 percent to $3.49 per million metric British thermal units. Gold futures fell 1.10 percent to $1,578.10 per ounce and silver futures tumbled 1.71 percent to $28.49 per ounce.
In the currency market, the euro retreated 0.60 percent against the U.S. dollar at 1.3060. The British pound inched up 0.01 percent against the greenback to 1.5161, and the dollar advanced 0.50 percent against the Japanese yen at 92.7000.