By Anora Mahmudova and Sara Sjolin, MarketWatch
NEW YORK (MarketWatch)--The U.S. stock market began Thursday's
session with a sharp selloff, but the tide turned and benchmarks
cut losses, seemingly after comments by a Federal Reserve officials
on possibility of extending bond purchases.
James Bullard, the president of the St. Louis Fed, said the
Federal Reserve should consider extending its bond-buying program
beyond October to see how the U.S. economic outlook evolves.
Bullard isn't a voting member this year of the rate-setting
FOMC.
Fears that the market has farther to fall persisted, however, as
evidenced by muted reaction to better-than-expected earnings and
upbeat economic reports.
The S&P 500 (SPX) was down 5 points, or 0.3%, to 1,857.71.
The Dow Jones Industrial Average (DJI) fell 47 points, or 0.3%, to
16,093.31. The Nasdaq Composite (RIXF) slipped 15 points, or 0.3%,
to 4,200.44.
The main benchmark erased nearly all of year-to-date gains and
is a few percentage points away from being in correction territory
(a decline of at least 10% from its peak). Read: Here's what drove
the market meltdown
Jeffrey D. Saut, chief investment strategist at Raymond James
wrote in a note that Wednesday's roller-coaster session was due to
market participants' inability to manage their risk in July, when
he prematurely predicted that the market would see a 10%
correction.
"The time to raise cash was in the June--August time frame, when
the dollar took off and negative divergences mounted, not now," he
wrote.
In economic news, initial weekly jobless claims dropped to their
lowest level in more than 14 years, while industrial production
climbed 1% in September. Manufacturers in the Philadelphia region
expanded a bit more slowly in October but growth was still strong,
according to the Philadelphia Federal Reserve. A gauge of
confidence among home builders pulled back this month from a
nine-year high in September, falling five points to 54, according
to National Association of Home Builders/Wells Fargo data released
Thursday
Earnings: The results season continued at full speed on
Thursday, with a heavy lineup ahead of the opening bell.
Goldman Sachs (GS) reported third-quarter earnings of $4.57,
beating a consensus estimate from FactSet of $3.21, but reported
higher expenses. Shares fell 2%.
Delta Air Lines (DAL) rose 2.6% after reporting third-quarter
results.
Tobacco maker Philip Morris International (PM) reported
third-quarter profit that topped expectations, but cut its
full-year outlook citing the negative impact from the currency
markets. Shares were little changed.
Toy maker Mattel Inc. (MAT) posted earnings and sales that fell
short of expectations as gross sales of its flagship Barbie doll
fell 21% world-wide. Shares dropped 4.6%.
UnitedHealth Group Inc. (UNH) reported third-quarter profit of
$1.63 a share, beating estimates of EPS of $1.53. Shares rose
4.5%.
Baker Hughes Inc. (BHI) shares dropped 9.4% after the
oil-field-services company reported earnings per share that fell
short of forecasts.
Movers and shakers: Netflix Inc. (NFLX) shares sank 23%, after
the video-streaming company on Wednesday said its new-subscriber
count fell short of its forecast of 3.69 million. It added 3.02
million new members during the quarter.
EBay Inc. (EBAY) lost 5% after the online retailer late
Wednesday reported third-quarter earnings fell to $673 million, or
54 cents a share, from $837 million, or 53 cents a share, in the
year-earlier period.
Apple Inc. (AAPL) was down 1.8%, ahead of a scheduled event
where the tech giant is expected to launch new iPads and the latest
in the iMac line.
Oil slide: Crude-oil futures continued their brutal decline on
Thursday, with the front-runner contract (CLX4) dropping below $80
a barrel, on track for the lowest settlement price since June 2012.
An OPEC official said U.S. oil prices could fall to around $70 a
barrel, suggesting that some in the Organization of the Petroleum
Exporting Countries see prices falling further.
Other markets: Europe's benchmark stock index dropped for an
eighth straight day, after closing 3.2% lower on Wednesday. Data
from Eurostat confirmed that inflation fell to an almost five-year
low of 0.3% in September. Read: European stocks slip into
correction amid 'perfect storm.'
Asian markets closed mostly in the red, with the Nikkei falling
2.2%. Most metals traded lower, while the dollar rose against most
major currencies.
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