By Kristina Peterson
U.S. stocks slipped on Thursday, as technology stocks dragged
and jobless claims and durable-goods orders improved by less than
expected.
The Dow Jones Industrial Average (DJI) was down 46 points, or
0.5%, at 10192, in early trading. American Express (AXP) was the
Dow's worst performer, down 1.3%.
Procter & Gamble (PG) led the measure, with the
consumer-goods company up 2.4% after its second-quarter profit
dropped 7%, but earnings were higher than expected and sales
grew.
The Standard & Poor's 500-share index (SPX) was down 0.1%,
with technology leading the declines. Cellphone chip-maker Qualcomm
(QCOM) tumbled 14% in recent trading after cutting its sales
outlook.
The tech-heavy Nasdaq Composite (RIXF) was down 0.6%.
The market's drop followed President Barack Obama's first State
of the Union address on Wednesday night. In his speech, the
president called for a host of job-creation measures and a
redoubled effort to finish health-care reform.
He pressed for tax cuts to promote small-business hiring and
business investment in plants and equipment, as well as a plan to
devote $30 billion in Wall Street bailout funds for small-business
lending through community banks. He aldo exhorted Congress to help
him tame the record budget deficit, calling for a three-year freeze
on spending on a small slice of the federal budget.
Investors largely welcomed Obama's focus on the financial system
and how businesses must participate in the economic recovery.
"His acknowledgement of the role of businesses in creating jobs,
it was good to hear that," said Stuart Schweitzer, global markets
strategist for J.P. Morgan's private bank.
Still, Schweitzer said Obama's proposed tax breaks are "small
potatoes, compared to the impact of the overall health of the
economy."
Economic data released Thursday morning indicated that the
economy continues to recover, though at a pace slightly slower than
anticipated.
The Labor Department reported Thursday that the number of U.S.
workers filing new claims for jobless benefits fell by 8,000 to
470,000 in the week ended Jan. 23. The previous week's level was
revised to 478,000 from 482,000. Economists surveyed by Dow Jones
Newswires expected initial claims to decrease by 32,000.
Separately, manufacturers' orders for long-lasting goods rose in
December by 0.3% to a seasonally adjusted $167.91 billion, the
Commerce Department said Thursday. Economists had projected a 2.0%
increase. Excluding aircraft, capital goods orders rose 1.3%.
Still, Schweitzer noted that last year's declines in capital
spending by businesses cut into the country's gross domestic
product.
"I have been expecting that with business profit margins holding
up and improving, that we would reach a position where businesses
would be looking to increase capital spending again," Schweitzer
said. "Today's durable goods report is supportive of an improved
outlook there."
Earnings from headline companies rolled in Thursday morning,
including Ford (F), up 2.5% in early trades after returning to a
profit, and mobile phone maker Nokia (NOK), up 9.5% after
stronger-than-forecast quarterly profit.
AT&T (T) dropped 0.9% after its fourth-quarter earnings rose
25% on fewer charges as the company added the second-most wireless
subscribers during a quarter in its history. And consumer-goods
maker Colgate-Palmolive (CL) gained 1.1% after its fourth-quarter
earnings rose 27%, benefitting from higher prices, stronger margins
and increased sales volume.
After the close, Microsoft (MSFT) and Amazon.com (AMZN) will
report earnings.
In other markets, the dollar strengthened against both the euro
and the Japanese yen. Crude-oil futures rose, while gold futures
also climbed. Treasurys slipped, with the 10-year note off 5/32 to
yield 3.667%.
Still to come on Thursday, the U.S. Senate is expected to
proceed with a vote on Fed Chairman Ben Bernanke's second term.