MARKET SNAPSHOT: U.S. Stocks Trim Losses To Finish Mixed Ahead Of Jobs Report
January 08 2009 - 4:57PM
Dow Jones News
By Kate Gibson
U.S. stocks on Thursday overcame most losses sparked by Wal-Mart
Stores Inc.'s gloomy forecast, gaining some relief after lawmakers
reached an agreement with Citigroup Inc. on a proposal intended to
reduce home foreclosures.
Bouncing back from a triple-digit decline, the Dow Jones
Industrial Average (DJI) ended down 27.24 points, or 0.3%, at
8,742.46.
Wal-Mart (WMT) proved the blue-chip index's greatest laggard,
off 7.5%. The world's largest retailer posted lower-than-expected
December sales and cut its fourth-quarter forecast. .
"Wal-Mart had been the stand-alone shining star, one of the two
stocks up on the Dow last year," said Art Hogan, chief market
strategist at Jefferies & Co.
"Unfortunately, like the rest of retail, it's falling into the
category of being hurt by lower consumer spending. Any way you
slice it, Wal-Mart is going to be a big disappointment."
The S&P 500 (SPX) gained 3.08 points, or 0.3%, to 909.73,
with telecommunication services, energy and materials faring the
best among the S&P's 10 industry groups.
Also turning positive, the Nasdaq Composite (RIXF) added 17.95
points, or 1.1%, to 1,617.01.
Volume on the New York Stock Exchange came to nearly 1.2
billion, and advancers outpaced decliners more than 3 to 2. On the
Nasdaq, almost 754 million shares traded, and advancers led
decliners 8 to 5.
In the final hour of trading, investors seemed cheered by news
of a breakthrough agreement that could help curtail home
foreclosures. Sen. Richard Durbin, D-Ill., hailed a decision by
Citigroup to drop opposition to legislation that would give
bankruptcy judges the power to eliminate some mortgage debt.
A slew of other retailers -- including Gap Inc. (GPS), Macy's
Inc. (M) and Limited Brands Inc. (LTD) -- cut their profit
outlooks. .
Sears Holdings Corp. (SHLD), the operator of Kmart and Sears,
forecast quarterly profit above Wall Street expectations, and its
shares climbed 23%.
"In contrast to Wal-Mart, the retailer [Sears] posted
better-than-expected December sales figures and also guided fourth
quarter earnings estimates higher," said Frederick Ruffy, options
strategist at WhatsTrading.com.
Game Stop Corp. (GME) also offered a bright spot in a largely
dismal holiday season, with shares of the video-game retailer
climbing 13% after it reported a 10% rise in same-store sales
during the 2008 holiday season. .
Crude lapses
On the New York Mercantile Exchange, crude futures fell for a
third straight session amid worries the deepening economic troubles
in the world's biggest oil-consuming country would further cut
energy demand. .
Better-than-anticipated weekly jobless claims data did little to
overshadow the disappointing retail results, and they did not alter
gloomy forecasts for Friday's unemployment report.
The government early Thursday reported a drop in weekly jobless
claims, but analysts said the decline was likely due to technical
glitches that come with seasonally adjusting the numbers around the
holidays.
"The unemployment rate and change in nonfarm payroll numbers are
expected to be bad. The issue is the magnitude," said Hogan.
President-elect Barack Obama also spoke about unemployment in
urging Congress to get to work on a package of new spending and tax
cuts, saying the costly plan is need to head off dire consequences
for the country. .
The three-month dollar Libor continued to slide, falling to
1.35% from 1.4%.
"We should expect 3-month Libor to fall below 1%, simple bond
math makes it obvious. With the Fed committed to keeping short-term
rates low, no expectation exists that short rates will rise anytime
soon," said Tony Crescenzi, bond market strategist, Miller Tabak
& Co.
Overnight in Asia, technology, energy and financial shares led
regional markets lower, with the Hang Seng losing 3.8% and the
Nikkei 225 slumping 3.9%. .
In Europe, stocks fell, with mineral extractors and banks taking
the brunt of the losses.
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