Stocks were little changed on Thursday as data showing that the vast U.S. services sector contracted in November stoked concerns about the strength of the recovery, offsetting Bank of America's plan to repay $45 billion of government aid.
Shares of energy, manufacturing and natural resource companies were among the top drags. The S&P materials index <.GSPM> shed 0.4 percent, while the S&P energy index <.GSPE> declined 0.5 percent as crude oil prices retreated.
The services sector index fell to 48.7, indicating the large component of the economy had experienced contraction last month, according to an industry report.
The data dented sentiment a day before November's unemployment figures are released in an even more influential economic report.
The ISM services number came out and being below 50 it shows contraction, which I think surprised a lot of people, said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York. That seems to be exactly what hit the market.
Shares of Bank of America Corp , the largest bank by assets, were up 3.3 percent at $16.16.
With the stock market having rallied more than 60 percent, tolerance for disappointing data has thinned as investors seek justification for the lofty valuations. The benchmark S&P 500 index is up 63 percent from its March 9 closing low.
The Dow Jones industrial average <.DJI> shed 9.75 points, or 0.09 percent, to 10,442.93. The Standard & Poor's 500 Index <.SPX> dipped 0.45 point, or 0.04 percent, to 1,108.79. The Nasdaq Composite Index <.IXIC> gained 6.32 points, or 0.29 percent, to 2,191.35.
The Nasdaq drew some support from Comcast Corp , up 6.5 percent at $15.91 after the company struck a deal to buy a majority stake in NBC Universal from General Electric Co , creating a media superpower.
GE shares were up 0.8 percent at $16.19.
Wall Street initially rose after Bank of America made the surprising announcement on Wednesday in a what is viewed as a victory for departing Chief Executive Kenneth Lewis that could free the lender from pay curbs as it looks to hire a new CEO.
Thursday's other data showed that the number of U.S. workers filing new claims for unemployment fell last week, according to a government report, while third-quarter productivity was slightly less robust than previously thought, a third report said.
U.S. retailers posted much weaker-than-expected sales for November in a slow kickoff to the holiday shopping season.
The Retail HOLDRs ETF fell nearly 1 percent. Abercrombie & Fitch Co shed 7 percent to $37.14, while Target Corp fell 3 percent to $46.30.
Federal Reserve Chairman Ben Bernanke, speaking at hearing before a Senate panel on his nomination for a second term as Fed chief, said he did not see any extreme misvaluations of assets even as the Fed sticks to a near-zero interest rate policy.
The U.S. jobless rate, at a 26-year high of 10.2 percent, is expected to be unchanged in November, according to the forecast from a Reuters poll of economists.
But the White House has seen signs that the unemployment rate might tick upward, spokesman Robert Gibbs said at a briefing on Thursday.
(Editing by Kenneth Barry)