By Kristina Peterson
U.S. stocks fluctuated between small gains and losses Thursday
as retailers' back-to-school sales topped expectations, but weekly
jobless claims continued to suggest a sluggish employment recovery,
adding to worries on the eve of pivotal August employment data.
The Dow Jones Industrial Average (DJI) edged up 5 points, or
0.1%, to 10,276, in early trading. The Nasdaq Composite (RIXF) rose
less than a point to 2,177 and the Standard & Poor's 500 index
(SPX) eked out a gain of 1 point to 1,082, boosted by gains for
shares among its consumer-discretionary components.
Retailers delivered a late-summer surprise, with sales for the
key back-to-school buying month of August largely coming in better
than expected. Kohl's Corp. (KSS), J.C. Penney Co. Inc. (JCP) and
Macy's Inc. (M) all beat analyst expectations and the latter two
said back-to-school sales were going well. Kohl's climbed 1%, while
J.C. Penney surged 3.3% and Macy's edged up 0.6%.
However, Thursday's round of U.S. data pointed to continued
weakness in the economy. The number of U.S. workers filing new
claims last week for jobless benefits edged down slightly, but
their high level suggests lingering troubles in the job market.
Meanwhile, U.S. productivity in the second quarter fell more than
previously thought, a big drop that reflects the cooling of the
economy.
The data come a day ahead of the government's monthly employment
report. The jobless rate currently stands at 9.5%, and that figure
Friday is expected to creep up to 9.6% as U.S. employers drop a
projected 110,000 from payrolls.
On Wednesday, data on private-sector jobs for the month of
August disappointed, yet the Dow had its biggest one-day gain in
nearly two months thanks to better-than-expected manufacturing data
that gave investors the ray of hope they were looking for.
After such a big jump on Wednesday, many investors appear
hesitant to move stock up much higher ahead of Friday's employment
data.
The euro edged up to $1.2826, from $1.2803 late Wednesday,
following a successful auction of Spanish government debt and as
the European Central Bank kept its benchmark interest rate
unchanged at a record low 1%, as expected.
Jean-Claude Trichet, president of the central bank, said
additional bank funding would be extended on a "full allotment"
basis, citing continued uncertainties in the euro-zone economy.
The dollar index (DXY), gauging the performance of the U.S. unit
against a basket of six other currencies, slipped 0.1%. Treasury
prices also declined, lifting the yield on the 10-year note to
2.61%.
In commodities, crude-oil futures slipped while gold futures
edged higher.
The bidding war between Hewlett-Packard Co. (HPQ) and Dell Inc.
(DELL) over 3Par Inc. (PAR) took a fresh turn, with Dow component
H-P raising its latest offer to $33 a share from $30.
3Par said it determined H-P's revised proposal is "superior" to
the latest one from Dell, and notified Dell of its intention to
terminate their merger agreement. H-P edged up 0.1% as 3Par shares
climbed 4.7%, while Dell fell 1%.
Among other stocks in focus, Burger King Holdings Inc. (BKC)
soared 24% as the company announced 3G Capital would acquire the
fast-food retailer for $24 a share.
Also Thursday, Federal Reserve Chairman Ben Bernanke is
testifying at a hearing of the Financial Crisis Inquiry Commission,
which is charged with examining the causes of the financial
meltdown. Sheila Bair, chairman of the Federal Deposit Insurance
Corporation, is scheduled to testify as well.