By Kate Gibson
NEW YORK (MarketWatch) -- U.S. stocks retreated Thursday after a
four-session streak of gains as weekly jobless claims proved
disappointing and a separate report showed inflation remaining
fairly tame in September.
"The economy should be able to support current fourth-quarter
and early 2011 analysts' earnings estimates. However, the economy
still does not appear strong enough to add a meaningful number of
jobs," wrote Fred Dickson, chief market strategist at Davidson
Cos.
After a four-session run-up, the Dow Jones Industrial Average
(DJI) was lately down 45.1 points, or 0.4%, to 11,050.98, with 25
of its 30 components falling.
Bank of America Corp. (BAC) weighed most on the blue-chip index,
off 5.9%, with its shares and those of other banks hit as analysts
attempted to estimate losses related to the halt in home
foreclosures. .
Fast-food chain McDonald's Corp. rose the most among the Dow
industrials, its shares gaining 1.3%.
The S&P 500 Index (SPX) declined 7.82 points, or 0.7%, to
1,170.28, with telecom up the most and financials hit the
hardest.
Notable movers included Apollo Group Inc.(APOL), shares of which
fell 26% after the operator of the University of Phoenix rescinded
its outlook for fiscal 2011, pointing to scrutiny from regulators
and a possible 40% drop in new students.
Other for-profit eductors were also hit, with shares of most
suffering double-digit declines. .
Poised for its first lower finish in six sessions, the Nasdaq
Composite (RIXF) shed 10.85 points, or 0.4%, to 2,430.38.
Yahoo Inc. (YHOO) shares surged 3.6% after published reports
said the Internet-search company could be an acquisition target of
private-equity firms.
Rival Google Inc. (GOOG) is scheduled to release its earnings
report after the closing bell. .
For every three stocks advancing, four fell on the New York
Stock Exchange, where 482 million shares traded as of 12:30 p.m.
Eastern time.
Stock indexes retreated after the government said its count of
Americans filing initial applications for unemployment benefits
climbed last week. .
The increase in jobless claims helped push the dollar index
(DXY) , a measure of the U.S. currency against those of six other
nations, to its lowest level this year.
Dollar weakness helps drive the purchase of hard commodities,
including gold and equities, "especially those offering a dividend
yield above current interest rates," noted Davidson's Dickson.
Separately, the producer price index -- a gauge of how much
goods cost at the wholesale level -- climbed 0.1% last month,
excluding food and energy. .
Post-recession pressures stemming from excess capacity have kept
a lid on most consumer prices, but the scenario might not continue,
especially if the dollar continues to slide, said Dickson.