Dow, S&P 500 end down; bond trading bites bank profits

Analysts said that given the S&P 500's gain of 30 percent last year, the market doesn't need much of a catalyst for selling.

"You get a day like today with a little disappointment following a day when the market was up big, and we get a selloff like this," said Bucky Hellwig, senior vice president of BB&T Wealth Management in Birmingham, Alabama.

Concerns that stock valuations may be too high put some pressure on stocks after last year's rally. But the S&P 500 index surged 1.6 percent over the previous two sessions on results and economic data to close at a record high on Wednesday, its first since December 31.

The Dow Jones industrial average fell 64.93 points or 0.39 percent, to end at 16,417.01. The S&P 500 slipped 2.49 points or 0.13 percent, to finish at 1,845.89. The Nasdaq Composite added 3.805 points or 0.09 percent, to close at 4,218.68.

Though the earnings season has just started, companies are beating expectations at a rate that's below the long-term average. Based on earnings from 6 percent of S&P 500 companies, 48 percent are beating expectations, below the historical average of 63 percent for a full season, Thomson Reuters data showed.

After the closing bell, shares of Intel tumbled 2.4 percent to USD 25.90 following its results. In regular trading, Intel had slipped 0.5 percent to end at USD 26.54.

During the regular session, UnitedHealth Group Inc fell 2.8 percent to close at USD 72.76 after the largest US health insurer said that implementing the national healthcare reform law, often called Obamacare, and funding cuts for private Medicare coverage would result in some expenses that would eat into 2014 profit. UnitedHealth, however, reported a higher fourth-quarter profit on Thursday and said 2014 earnings would improve.

CSX Corp shares sank 6.8 percent to USD 27.24 a day after the US railroad reported profits that missed expectations.

The stock of Best Buy Co Inc plunged 28.6 percent to close at USD 26.83, making it easily the S&P 500's biggest percentage decliner, followed by CSX. Best Buy, the world's largest consumer electronics chain, reported a drop in holiday sales and forecast a bigger-than-expected decline in quarterly operating margins.

The day's economic data included initial claims for state unemployment benefits, which slipped 2,000 to a seasonally adjusted 326,000 in the week ended January 11. Claims for the prior week were revised to show 2,000 fewer applications received than previously reported, suggesting a sharp slowdown in job growth in December was likely to be temporary.

The Consumer Price Index rose 0.3 percent in December while the core CPI, which strips out volatile food and energy prices, edged up only 0.1 percent, suggesting underlying inflation was muted. The Philadelphia Federal Reserve Bank said its business activity index stood at 9.4 points in January, compared with 6.4 in December.

In the deal arena, Apollo Global Management LLC said it would buy CEC Entertainment Inc, the parent of the Chuck E Cheese restaurant chain, for about USD 948 million. CEC Entertainment's stock shot up 13.1 percent to USD 54.75. Apollo Global's shares rose 0.8 percent to end at USD 36.05.