US stocks ended little changed on Thursday, recouping losses late in the day, led by a sudden turnaround in Goldman Sachs and BP. BP's US-listed shares jumped 7.6 percent after the company said no oil is leaking from its blown-out well in the Gulf of Mexico for the first time since the accident began in April.
Goldman Sachs' gains coincided with the Securities and Exchange Commission saying that it would make a "significant announcement" later in the afternoon. The announcement prompted speculation the SEC was going to settle fraud charges with Goldman Sachs, which proved to be true. Shares of Goldman rose 4.4 percent to $145.22.
The potential resolution of two major overhangs - BP's oil spill and fraud charges against Goldman Sachs by US regulators - was enough to turn market sentiment around in the last half hour. "In essence, you'll have 'closure' on two issues," said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.
Goldman said it would pay $550 million to settle SEC charges that it misled investors in a subprime mortgage product. Goldman's shares continued to climb after the bell, rising 2.9 percent to $149.40. The Dow Jones industrial average dipped 7.41 points, or 0.07 percent, to end at 10,359.31. The Standard & Poor's 500 Index added 1.31 points, or 0.12 percent, to 1,096.48. The Nasdaq Composite Index was off 0.76 of a point, or 0.03 percent, to 2,249.08.
Despite the turnaround, the Dow and Nasdaq both ended a hair lower, snapping a seven-day winning streak. BP ended up at $38.92 after it said initial results showed a newly placed cap had completely contained the flow of oil from the ruptured well. The three major US stock indexes spent most of the day in negative territory, weighed down by a subdued outlook on the economy from J.P. Morgan Chase & Co and disappointing factory data.
An unexpected fall in regional factory activity and a third straight month of decline in producer prices raised concerns about deflation, cooling enthusiasm for the strong start to the earnings season that had lifted stocks off recent lows. J.P. Morgan Chase & Co reported quarterly earnings that beat expectations, but offered a cautious outlook on the economy.
The stock recovered to add 0.3 percent to $40.46, but its sober economic view hit the shares of competitors Citigroup Inc, down 1.2 percent at $4.16, and Bank of America Corp, which dropped 1.8 percent to $15.39. Both report their earnings on Friday. The S&P Financial Index dipped 0.1 percent. Earnings and guidance from bellwethers such as Alcoa and Intel have been strong, but that has done little to counter the disappointing economic data, given that market leaders can do well even in a weak economy.
But Google Inc disappointed after the bell, reporting profit that missed expectations and driving its shares down 4.7 percent to $470.79 in extended-hours trading. On the bright side for technology, Advanced Micro Devices Inc reported results after the bell that topped expectations as corporate spending on tech hardware strengthened. Its shares climbed 4.6 percent to $7.75 in extended-hours trading.
About 8.11 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's estimated daily average of 9.65 billion. Declining stocks slightly outnumbered advancing ones on the NYSE, with 1,523 shares falling and 1,459 rising. On the Nasdaq, two stocks fell for every one that rose.
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