* Utilities, energy stocks sell off as investors book
* Momentum names rebound from recent decline
* Indexes: Dow flat, S&P down 0.3 pct, Nasdaq off 0.6 pct
(Updates to late afternoon trade)
By Angela Moon
NEW YORK, May 8 U.S. 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
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.
"I think it was technical once again. We got right to
resistance, we challenged it, but had no momentum to get
through," said Ken Polcari, director of the NYSE floor division
at O'Neil Securities in New York.
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.
Of 445 companies in the S&P 500 that have reported earnings
through Wednesday morning, 68.2 percent beat expectations, above
the 63 percent average since 1994 and the 66 percent beat rate
for the past four quarters, according to Thomson Reuters data.
Profits are expected to rise 5.3 percent this quarter, down
from the 6.5 percent estimated at the start of the year, but
above the low of 0.6 percent in mid-April, according to Thomson
U.S. 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.
Initial claims for state unemployment benefits declined
26,000 to a seasonally adjusted 319,000 for the week ended May
3, snapping three weeks of declines. Economists polled by
Reuters had forecast first-time applications for jobless
benefits to fall to 325,000 last week.
(Additional reporting by Rodrigo Campos; Editing by Nick