Overnight Markets: US stocks erase gains to close flat

US stocks closed flat on Thursday after erasing gains in the final minutes of trading after the Senate rejected a pair of partisan proposals to replace $85 billion in automatic spending cuts scheduled to start today.

The Dow Jones industrial average shed 21 points, or 0.15%, to 14,054 at the close. The Standard & Poor's 500 Index lost one point, or 0.09%, to 1,515. The Nasdaq Composite Index fell two points, or 0.07%, to end at 3,160.

For the month, the Dow rose 1.4%, the S&P 500 gained 1.1% and the Nasdaq advanced 0.6%.

US economy managed to barely expand in the fourth quarter, erasing a previously estimated contraction. Data also showed fewer Americans than estimated filed applications for unemployment benefits last week.

Limited Brands and Netflix ranked among the best-performing consumer stocks. Shares of Limited Brands gained 2.3%. The stock of video streaming service Netflix climbed 2%.

Mylan Inc gained 3.6% after the generic drugmaker posted a 25% rise in fourth-quarter profit and said it will purchase a unit of India's Strides Arcolab Ltd.

JC Penney Co Inc was the day's biggest loser, plunging 17% after the department store operator reported a steep drop in sales. Shares of Groupon Inc fell on weak revenue, with the daily deals company's tumbling 24.3%.

Cablevision slumped 9.6% after the cable provider took a $100 million hit on costs related to Superstorm Sandy and posted deeper video customer losses than expected.

Sears Holdings Corp. fell 5.2% after posting a fourth-quarter loss that was larger than it forecast. Intuitive Surgical Inc. lost 11% as the provider of robots used in surgery is being probed by US regulators over the safety of its products.

In Asia, shares declined on Friday in late morning trade after $85 billion of US spending cuts are set to begin and after Japan’s consumer prices fell while Chinese manufacturing growth slowed.