* Encouraging economic data help stocks retreat from lows
* HP jumps after raising 2013 outlook
* Investors fret about timing of Fed stimulus pullback
* Dow off 0.03 pct, S&P 500 off 0.3 pct, Nasdaq off 0.2 pct
By Leah Schnurr
NEW YORK, May 23 U.S. stocks slipped on
Thursday, recovering from session lows as encouraging domestic
economic data and a rally in Hewlett-Packard's shares offset
concerns about the timing of any reduction in the Federal
Reserve's monetary stimulus.
Hewlett-Packard jumped nearly 14 percent and helped
support the Dow a day after the world's largest PC maker raised
its outlook. HP's sharp gains had briefly helped the Dow edge
into positive territory at midday.
Signs of improvement in the housing and labor markets also
helped indexes come off their lows by midday.
"The housing recovery has been so important to the markets
and how people are thinking about the (economic) recovery," said
Michael O'Rourke, chief market strategist at JonesTrading in
For most of the morning, the market had been pulled lower by
worries that the Fed's stimulus may be scaled back sooner than
hoped and after weak factory data in China.
The Dow Jones industrial average edged down 4.37
points, or 0.03 percent, to 15,302.80. The Standard & Poor's 500
Index slipped 5.71 points, or 0.34 percent, to 1,649.64.
The Nasdaq Composite Index shed 6.68 points, or 0.19
percent, to 3,456.62.
Hewlett-Packard Co shares jumped 13.7 percent to
$24.14 a day after the computer maker raised its 2013 earnings
outlook following quarterly results that beat low expectations.
Earlier, the S&P 500 traded below its 14-day moving average
before bouncing back above it. Holding above that level would be
positive sign to investors as it would suggest the uptrend is
Ralph Lauren Corp shares lost 2.4 percent to $183.51
after the fashion company reported sales below its own
On Wednesday, the S&P 500 posted its biggest decline
in three weeks after minutes from the U.S. Federal Reserve's
latest meeting showed some officials were open to tapering
large-scale asset purchases as early as at the June meeting.
The minutes came in the wake of comments from Fed Chairman
Ben Bernanke, who said the Fed could scale back the pace of its
bond purchases at one of the "next few meetings" if the economic
recovery looked set to maintain forward momentum.
When the Fed may decide to slow or halt its program of
buying $85 billion of bonds a month has become one of the
biggest questions on investors' minds. The central bank's
stimulus efforts have helped propel markets to all-time highs
this year and investors are trying to gauge whether a change in
the program could spell the end of the rally.
"It isn't their absolute level of involvement in buying
bonds that's going to determine the stock market. It's going to
be the perception of whether they're there or not," said Uri
Landesman, president of Platinum Partners in New York.
"Once they really meaningfully step away, investors are
going to realize they're just not going to be there and that the
market's going to have to stand on its own feet."
On the economic front, the number of Americans filing new
claims for unemployment benefits fell more than expected last
week, suggesting strength in the labor market. New home sales
rose in a sign that the sector's rebound is still intact. But
separate data showed manufacturing slowed for a second straight
month in May.