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Investor sentiment was dampened yesterday following weak earnings and a discouraging outcome to the ECB meeting, dragging major indices into the red. Initial claims showed gradual signs of improvement in the U.S. economy, but could not help indices finish in the green. Among the top 10 S&P 500 groups, material stocks were the biggest losers while consumer staples sector emerged as the major gainer.

The Dow Jones Industrial Average (DJI) decreased 0.3% to close the day at 13,944.05. The S&P 500 declined 0.2% to finish yesterday’s trading session at 1,509.39. The tech-laden Nasdaq Composite Index lost 0.1% to end at 3,165.13. The fear-gauge CBOE Volatility Index (VIX) increased 0.7% to settle at 13.50. Consolidated volumes on the New York Stock Exchange, American Stock Exchange and Nasdaq were roughly 6.6 billion shares, higher than the daily average of 6.45 billion shares in 2012. Declining stocks outnumbered the advancers on the NYSE. For 38% stocks that advanced, 58% declined.

The Street began yesterday’s trading session in a bearish mood and the Dow lost as much as 134 points initially. But the index recovered almost 100 points later in the day. Following the European Central Bank policy meeting, ECB president Mario Dragi said the Euro Zone will continue to struggle in the first half of 2013. “Later in 2013, economic activity should gradually recover, supported by our accommodative monetary policy stance, the improvement in financial markets confidence... as well as a strengthening of global demand,” he added. The ECB has maintained its benchmark rate at a record low of 0.75%.

On the earnings front, shares of software and programming giant Akamai Technologies, Inc. (NASDAQ:AKAM) dropped 15.2% after the company’s revenue came in below the Street’s expectations. Shares of Sprint Nextel Corporation (NYSE:S) dropped almost 0.5%. The company suffered a loss after its customer-base in contract-based plans shrunk by 243,000. It also had to bear an extra cost of $1.3 billion to upgrade its network so as to more effectively compete with its rivals.

On a positive note, shares of DeVry Inc. (NYSE:DV) surged 16.4% after earnings beat the Street’s estimates. The company grew profit via cost cutting and restructuring. Shares of auto parts giant O'Reilly Automotive Inc (NASDAQ:ORLY) surged 8% after its earnings beat the Street’s estimates.

According to the U.S. Department of Labor, the number of Americans filing for unemployment benefits decreased 5,000 to 366,000 from prior week’s revised figure of 371,000. This was above the consensus estimate of 363,000. Consequently, the four-year moving average has decreased to its lowest level since March 2008. Meanwhile, the Federal Reserve System said Consumer Credit stepped up to 6.5% for the fourth quarter. Revolving credit increased marginally by 0.1% while the Non-revolving credit increased 9.4% for the same period.

Among the top 10 S&P 500 industry groups, consumer staples sector was the larger gainer. The Consumer Staples SPDR (XLP) increased 0.5%. Stocks such as The Coca-Cola Company (NYSE:KO), Altria Group, Inc. (NYSE:MO), Colgate-Palmolive Company (NYSE:CL), General Mills, Inc. (NYSE:GIS) and PepsiCo, Inc. (NYSE:PEP) gained 1.6%, 1.4%, 0.4%, 0.3% and 0.1%, respectively.

The biggest loser among the S&P 500 industry groups was the materials sector. The Materials SPDR (XLB) decreased 0.5%. Stocks such as Nucor Corporation (NYSE:NUE), Ecolab Inc. (NYSE:ECL), Monsanto Company (NYSE:MON), The Dow Chemical Company (NYSE:DOW) and Praxair, Inc. (NYSE:PX) decreased 1.5%, 0.8%, 1.1%, 1% and 0.3%, respectively.

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