Stocks open flat Thursday amid fiscal cliff worries and despite some upbeat economic data.



NEW YORK (TheStreet) -- The major U.S. stock averages opened flat Thursday as some upbeat domestic economic news was offset by persistent worries about the so-called fiscal cliff in the U.S.

The Dow Jones Industrial Average was flat at 13,245. The blue-chip index began the session up about 8.5% in 2012.

The S&P 500 was down 0.23 points, or 0.02%, at 1428. The Nasdaq was up 0.82 points, or 0.02%, at 3014.

Major U.S. stock averages reversed gains in the final hour of trading on Wednesday as Federal Reserve Chairman Ben Bernanke answered reporters' questions after the central bank fulfilled the wishes of the markets for a fresh round of stimulus.

During the question and answer session, Bernanke said it is clear that the "fiscal cliff" issue is having an impact on the economy, with the uncertainties about the negotiations affecting consumer and business sentiment and investment.

He said if the cliff did occur the Fed would not have the tools to offset it.

"Clearly the fiscal cliff is having effects on the economy ... we cannot offset the full impact of the fiscal cliff. It's just too big," he warned.

Tensions are once again rising in Washington over the budget talks as Republicans criticize President Barack Obama's most recent budget plans as unbalanced, saying they concentrate too heavily on tax increases on wealthy Americans and not enough on spending reductions.

"Unfortunately, we need to rely on our elected officials to chart a course toward greater clarity about the future of the U.S. economy, and a healthier balance between the government and business sectors," said Julia Coronado, chief economist for North America at BNP Paribas.

The Labor Department reported Thursday that initial jobless claims for the week ended Dec. 8 were 343,000, a decrease of 29,000 from the previous week's upwardly revised figure of 372,000.

"Initial claims showed substantial improvement in the past week," said Gennadiy Goldberg, a U.S. strategist at TD Securities.

The four-week moving average was 381,500, a decrease of 27,000 from the preceding week's average of 408,500.

Continuing claims for the week ended Dec. 1 were 3.198 million, a decrease of 23,000 from the prior week's upwardly revised level of 3.221 million.

On average, economists were expecting jobless claims to come in at 370,000 and continuing claims of 3.21 million.

The Census Bureau reported that retail sales increased 0.3% in November after falling 0.3% in October. Economists were expecting a 0.5% increase.

Excluding the auto component, sales remained flat like in October, as expected.

"Only three of 13 sectors saw sales decline in November," noted Andrew Wilkinson, chief economic strategist at Miller Tabak. "The most recent data was boosted by gains within nonstore, building materials and electronics."

The Bureau of Labor Statistics said Thursday that producer prices fell 0.8% in November after declining 0.2% in October; core data rose 0.1% after being down 0.2% the previous month. Economists, on average, expected producer prices to fall 0.5% in November and for core data to rise 0.2%.

The FTSE 100 in London was down 0.31% and the DAX in Germany was behind by 0.32% as the European markets assessed the latest comments from the Fed.

On Thursday, European Union finance ministers reached a banking union agreement and have given the green light on the payment of €49 billion to Greece.

Japan's Nikkei average finished ahead by 1.68% on Thursday thanks to a sharp decline in the yen. Hong Kong's Hang Seng index settled off by 0.26% as "fiscal cliff" uncertainties were offset by the persistent outperformance of Hong Kong-listed Chinese shares driven by foreign investment interest.

Gold for February delivery was plunging $21.20 at $1,696.70 an ounce at the Comex division of the New York Mercantile Exchange, while January crude oil contracts were shedding 40 cents at $86.37 a barrel.



The benchmark 10-year Treasury was rising 3/32, diluting the yield up to 1.693%. The dollar was up 0.18%, according to the U.S. dollar index.

In corporate news, Sprint (:S) is looking to purchase the rest of Clearwire (: CLWR ) for $2.1 billion to attain complete ownership of the company's wireless spectrum.

Sprint shares were down 0.71% and Clearwire shares were popping 13%.

Best Buy (:BBY) shares were jumping more than 14% Thursday amid reports that the electronic retailer's founder Richard Schulze plans to announce a formal $5 billion to $6 billion takeover offer this week for the company.

Google's (:GOOG) Maps app is again available on Apple's (:AAPL) iPhone.

Google's online mapping system returned late Wednesday, nearly three months after Apple replaced Google Maps with its own navigation tool but with disastrous results.

Apple's Maps software proved far interior to Google's and its shoddiness prompted an apology from Apple CEO Tim Cook.

Google shares were up over 1% while Apple shares were sliding 0.73%.

Ciena(:CIEN) posted a wider-than-expected fourth-quarter loss of 7 cents a share, a penny wider than Wall Street expectations, as the network specialist and its competitors continue to be impacted by spending reductions and postponed purchases by telecom service providers.

Shares were up more than 3.5%.

Knight Capital Group (:KCG) expects to make a decision on its future ownership by early next week, The Wall Street Journal reported, citing people familiar with the matter.

Shares were up 0.93%.

Rival trading firms Getco and Virtu Financial, which both have submitted bids to buy the market-maker, are fine-tuning their takeover proposals for Knight, the Journal said. Final offers are expected to be handed to Knight 's board and investors by the end of this week, the people told the newspaper.

Shares were up 0.18%.

Adobe Systems (:ADBE), the maker of Photoshop and other software for digital artists, is expected by analysts Thursday to post fourth-quarter earnings of 57 cents, down from 67 cents a share a year earlier.

Shares were up 1%.

PhotoMedex (: PHMD ) shares were tacking on more than 2% after the global skin health solutions company hiked its fourth-quarter sales growth guidance .

-- Written by Andrea Tse in New York.



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