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Micron, Lennar ( LEN ) fall after results

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Banks firm as U.S. bond yields rise

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Q3 GDP revised higher

(Updates to market close)

By Chuck Mikolajczak

NEW YORK, Dec 19 (Reuters) - U.S. stocks ended little

changed on Thursday, as an early rebound from a sharp drop in

the prior session after the Federal Reserve forecast

fewer-than-expected interest rate cuts and higher inflation next

year.

Economic data was in sync with the Fed's view, with weekly

initial jobless claims falling more than expected while gross

domestic product for the third quarter was revised to show a

3.1% increase from the previously reported 2.8% pace.

"It clearly sent a message that rates weren't going to keep

going down if inflation didn't continue its decline, and we've

seen inflation tick up a bit here, and that's a concern to the

Fed," said Tim Ghriskey, senior portfolio strategist at Ingalls

& Snyder in New York.

"Today you would have expected, given the sell-off and the

sharpness of it, you'd see a bounce today, and we are seeing

one, it just isn't with a lot of conviction here."

According to preliminary data, the S&P 500

lost 5.08 points, or 0.09%, to end at 5,867.08 points,

while the Nasdaq Composite lost 23.12 points, or 0.12%,

to 19,369.58. The Dow Jones Industrial Average rose 14.41

points, or 0.03%, to 42,341.28.

The Dow and S&P 500 suffered their biggest one-day

percentage drop since early August, while the Nasdaq suffered

its biggest daily fall since July after the Fed on Wednesday

said it expects to make just two 25 basis point cuts in 2025,

half a percentage point less than its September forecast for the

first year of the new Trump administration.

Traders now see just one quarter-point rate reduction by

mid-2025, and see less than two cuts in total by the end of the

year, compared with last week's expectations of three rate cuts.

Longer-dated Treasury yields were higher after the economic

data, with the benchmark 10-year note reaching a

near 7-month high of 4.594%.

The CBOE volatility index, Wall Street's fear gauge,

eased after hitting a 5-1/2-month high of 28.32 a day earlier.

Bank stocks advanced as a rise in yields tends to

improve the profitability of lenders, while the incoming Trump

administration is expected to loosen regulations on the sector.

Micron slumped following its forecast of quarterly

revenue and profit below estimates.

Homebuilder Lennar ( LEN ) shares retreated after reporting

fourth-quarter results below estimates, weighing on the PHLX

housing index.