Wall Street erases earlier gains as utilities, energy sell off
US stocks erased earlier gains with the S&P 500 and the Nasdaq turning lower in a volatile session, led by losses in the energy and utility sectors.
A turnaround in beaten-down momentum names had boosted the Nasdaq earlier, while a drop in initial jobless claims suggested the labor market was improving and had helped lift the broader market.
But a late selloff in utilities and energy, among the best performing sectors recently, dragged the S&P 500 and the Nasdaq to near session lows.
The S&P utility sector index was down 1.2 percent and the energy sector index was off 1.1 percent.
The Dow Jones industrial average rose 4.53 points or 0.03 percent, to close at 16,523.07, the S&P 500 lost 5.88 points or 0.31 percent, to 1,872.33 and the Nasdaq Composite dropped 23.751 points or 0.58 percent, to finish at 4,043.923.
Momentum stocks rebounded. The Global X Social Media Index ETF, which had fallen more than 14 percent since April 22, advanced 0.9 percent.
Twitter Inc jumped 3.3 percent to $31.68 and Groupon Inc gained 6 percent to $5.65.
But Tesla Motors shares fell 11 percent to $178.74, a day after the company's outlook for the second quarter that disappointed some investors.
US Federal Reserve Chair Janet Yellen, in testimony to a Senate panel, said no decision had yet been made on the central bank's portfolio of assets, which has swollen to $4.5 trillion from about $800 billion in 2007. If the Fed ultimately shrinks it to a pre-crisis size, the process could take the better part of a decade, Yellen said.
Meanwhile, European stock markets rose after reassuring updates from top companies, such as the German supermarket chain Metro, and better-than-expected Chinese trade figures.
Investors were also focusing on the European Central Bank's interest rate decision later today. Most expect the ECB to leave rates on hold at a record low of 0.25 percent.
The pan-European FTSEurofirst 300 index, which rose to near a six-year high of 1,357.05 points earlier this month, climbed 0.5 percent to 1,350.94 points in mid-session trading.
The euro zone's blue-chip Euro STOXX 50 index rose 0.6 percent to 3,178.74 points. Germany's DAX gained 0.5 percent to 9,573.04 points.
Data also showed that China's exports and imports returned to slight growth in April, sending a positive signal for the world's second-biggest economy after a weaker-than-expected start to 2014.
The ECB was expected to take heart from signs of life in the euro zone economy and leave interest rates at 0.25 percent, resisting pressure to act in the face of a stronger euro and persistently low inflation.
Japan's Nikkei share average, in turn, rose as comments by the U.S. Federal Reserve chief and upbeat Chinese data improved sentiment, while Nintendo pared early losses after its chief said it will plan to launch a console for emerging markets.
The Nikkei ended up 0.9 percent at 14,163.78, recovering from a three-week closing low of 14,033.45 hit yesterday.