NEW YORK, June 26 (Xinhua) -- U.S. stocks cut earlier losses but still closed in negative territory Thursday, as investors mulled over whether the Federal Reserve would hike interest rates sooner than expected.
The Dow Jones Industrial Average lost 21.38 points, or 0.13 percent, to 16,846.13. The S&P 500 dropped 2.31 points, or 0.12 percent, to 1,957.22. The Nasdaq Composite Index edged down 0.71 point, or 0.02 percent, to 4,379.05.
The market posted a seesaw session before closing marginally lower, as investors felt confused somewhat about when the Fed would start tightening its highly accommodative monetary policy.
Wall Street was once spooked in the morning session by hawkish remarks from St. Louis Fed President James Bullard who reaffirmed that federal funds rate may be hiked in early 2015. In an interview with FOX Business Thursday, he also said that inflation seemed likely to move back to the Fed's long-term target of 2 percent later this year.
However, the stock market recovered most of its earlier losses in the afternoon session, as investors continued to ponder the possibility of an earlier-than-expected interest rate increase.
On the previous trading day, the stock market rose, as official revision data showed that the U.S. economy contracted at a deeper- than-expected pace in the first quarter of 2014, which prompted market speculations that the U.S. central bank may keep ultra-low interest rates for a longer time in a response to the disappointing growth number.
Economic data came out lackluster in the day, giving no reasons for investors to make a big move on stocks.
In the week ending June 21, the advance figure for seasonally adjusted initial claims was 312,000, a decrease of 2,000 from the previous week's revised level, said the Labor Department. The reading was slightly above market consensus.
Meanwhile, the four-week moving average, which helps smooth out week-to-week volatility, was 314,250, an increase of 2,000 from the previous week's revised average, the department added.
"But even with this latest move up, the four-week average has remained at fairly low levels over the past month or so which is suggestive of relatively favorable conditions in the labor market, " said Daniel Silver, economist at J.P. Morgan Chase & Co, in a note.
U.S. personal consumption expenditures increased 0.2 percent in May, while personal income rose 0.4 percent, the Commerce Department reported. Economists had expected 0.4-percent gains for both figures.
In corporate news, shares of Nike rallied in after-hours trading as the Dow component released shortly after the closing bell its earnings and revenues in the fourth quarter of fiscal 2014 both of which exceeded market estimates.
The CBOE Volatility Index, a gauge of fear in the market, advanced 0.35 percent to end at 11.63 on Thursday.
In other markets, crude prices fell as markets thought the Iraq unrest would not disrupt crude output. Light, sweet crude for August delivery moved down 66 cents to settle at 105.84 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for August delivery lost 79 cents to close at 113.21 dollars a barrel.
Gold futures on the COMEX division of the New York Mercantile Exchange dropped on technical selling, with the most active gold contract for August delivery down 5.6 dollars, or 0.42 percent, to settle at 1,317 dollars per ounce.
The U.S. dollar stayed weak against most major currencies as U. S. data continuously painted a gloomy economic picture.
In late New York trading, the euro fell to 1.3607 dollars from 1.3629 dollars of the previous session, and the dollar bought 101. 68 Japanese yen, lower than 101.85 yen of the previous session.