Wall Street dipped on Thursday as housing and financial stocks declined after weaker-than-expected housing data gave investors reason to pause after a recent rally.
Housing-related stocks declined after data showed sales of new single-family homes fell for the first time in four months in December and were shy of Wall Street expectations. The data followed Wednesday's soft pending home sales report and dented optimism that the housing market may have reached a bottom.
Traders said the market's surprising advance at the start of 2012 meant investors are paying close attention to economic reports that differed from the trend of an improving recovery.
They are paying attention to everything, with the market up where it is right now. For the fire to continue burning, you need more fuel, said Uri Landesman, president at Platinum Partners in New York
Stocks began higher, helped in part by the Federal Reserve's vow on Wednesday to keep interest rates near zero at least until the end of 2014. Investors bet more money would be driven into risky assets, contributing to a rise in the benchmark S&P index of more than 5 percent for the year.
Toll Brothers Inc
Stocks rose at the start of the session after data showed orders for durable manufactured goods rose more than expected in December, while unemployment benefit claims last week rose only moderately.
The Dow Jones industrial average <.DJI> gained 11.27 points, or 0.09 percent, to 12,768.23. The Standard & Poor's 500 Index <.SPX> dropped 4.26 points, or 0.32 percent, to 1,321.79. The Nasdaq Composite Index <.IXIC> lost 8.45 points, or 0.30 percent, to 2,809.86.
This is one of the busiest weeks of earnings season, with 117 S&P companies expected to report. According to Thomson Reuters data, 59 percent of the 152 companies in the S&P 500 that have reported earnings beat analysts' forecasts, down from the 70 percent beat rate in recent quarters at this stage.
Micromet's shares jumped 31.9 percent to $10.92 and were the most heavily traded on Nasdaq.
(Reporting By Chuck Mikolajczak; Editing by Kenneth Barry)