Afternoon Rally Fizzles Late, Snapping Four-Day Advance

Stocks climbed off their mid-day lows enough to carry the major U.S. market indices back within close range of positive territory on Wednesday, but could not make the final push to extend their rally to a fifth session.

Stocks tracked by the S&P 500 gave back yesterday's small gains and closed down for the first time since Feb. 14. The Dow Jones Industrial index also saw its four-day advance snapped.

Equities briefly turned positive this morning after the National Association of Realtors reported that existing home sales climbed 4.3% in January over the prior month, topping expectations, and rising to an annualized 4.57 million homes, the best rate in 20 months but narrowing trailing the pace most experts forecast. The inventory of homes available for sale contracted somewhat last month, indicating supplies may be starting to tighten and eventually could help lift prices for sellers.

But the trade group also sharply reduced its December sales figures, paring the sales pace to an annualized 4.38 million-unit rate rather from a previously reported 4.61 million units. The revisions resulted from new seasonal formulas calculated at the start of 2012 and is based on sales data from the past three years.

Reports overnight found that services and manufacturing output in Europe shrank during February, according to Markit Economics, while another report indicated Chinese manufacturing activity may have receded for a fourth straight month during February. Asian markets ended higher but the European bourses fell, helping establish a downward bias for U.S. stocks today.

Energy stocks were the only industry sector in S&P 500 to consistently post gains today as crude oil maintained its perch above $106 a barrel. Healthcare, materials and utilities companies also turned positive in afternoon trade while tech stocks also rallied only to retreat in the final hour.

In company news, Citigroup (C) shares ended down about 3% yesterday, pressured by reports the bank is facing a multi-million-dollar writedown as it begins to unwind its minority stake in Morgan Stanley Smith Barney. Citi reportedly may also have violated rules for home loans sold to Fannie Mae and Freddie Mac, according to a whistle-blower's complaint obtained by Bloomberg News.

Also, HealthStream (HSTM) was set to finish up nearly 30% yesterday, establishing a new 52-week high, after reporting better than expected Q4 results in Tuesday's after hours session. The company said that Q4 sales were $21.9 million, beating the Thomson Reuters mean for $21.28 million. EPS were $0.07, a penny above forecasts. Looking forward, it anticipates 2012 revenues will grow as much as 25% over last year with operating income rising as much as 26%.

Commodities finished slightly higher Wednesday, with crude oil trading on both sides of even during the day and ending with a 3-cent gain to settle at $106.28 a barrel. Natural gas rose 1.7 cents, settling at $2.643 per 1 million British Thermal Units. Gold added $12.90 to end at an even $1,770 an ounce.

Here's where the markets stood at end-of-day yesterday:

Dow Jones Industrial Average down 27.02 (-0.21%) to 12,938.67

S&P 500 down off 4.55 (-0.33%) to 1,357.66

NASDAQ Composite down down 15.40 (-0.52%) to 2,933.17

GLOBAL SENTIMENT

Hang Seng Index up 0.33%.

China Shanghai Composite up 0.93%

FTSE 100 down 0.20%.

UPSIDE MOVERS

(+) TOPS, Oil shipper strikes deal reducing management fees it pays by 30%.

(+) FIRE, Q4 results top expectations; issues upbeat revenue guidance.

DOWNSIDE MOVERS

(-) NFX, Reports adjusted Q4 EPS of $0.95, short of analyst mean $1.02 a share.

(-) REXX, Q4 EPS of $0.03 trailed $0.07 a share forecast in Street view.