Markets mixed on oil, retail news
Disappointing retail sales figures and an unexpected jump in unemployment claims prompted investors to take profits Thursday, leaving stocks mixed despite another big drop in oil prices.
One day after crude oil futures posted their biggest decline since September 2001, oil prices again fell sharply. A barrel of light crude for January delivery settled at $43.25, down $2.24, on the New York Mercantile Exchange. Crude prices fell as low as $42.50 during the session.
However, stock investors were disappointed with November sales reports from the nation’s retailers. A number of top retailers issued lower-than-expected sales reports as the holiday shopping season got under way. With two-thirds of the U.S. economy powered by consumer spending, many investors hoped strong holiday spending would boost the economy through the end of the year.
“Obviously retail sales are a major concern going forward, but the falling oil prices will definitely help the market,” said Michael Sheldon, chief market strategist at Spencer Clarke LLC. “If we can stabilize around the $40 level, we’ll see a pretty good year-end rally in stocks.”
The Dow Jones industrial average fell 5.10, or 0.05 percent, to 10,585.12. The Dow climbed more than 162 points Wednesday.
Broader stock indicators were narrowly mixed. The Standard & Poor’s 500 index was down 1.03, or 0.09 percent, at 1,190.34, and the Nasdaq composite index gained 5.34, or 0.25 percent, to 2,143.57.
Investors also were nervous after the Labor Department reported a sharp rise in first-time unemployment claims, which climbed 25,000 to 349,000 last week. Wall Street expected an increase of just 7,000. While unemployment generally remains low, the Labor Department figures, coming just one day before a major job creation report for November, were cause for concern on Wall Street.
“I think what you’re seeing here is a little bit of profit taking after a really impressive day yesterday, and the retail figures and unemployment are good triggers for that,” said Brian Williamson, equity trader at The Boston Company Asset Management. “There’s no real big reason, nothing glaring, for this move to the downside, so we’re probably looking at some short-term asset allocation moves out of equities.”
Should jobs increase and oil prices continue to fall, more consumers could be drawn back to the stores, increasing investors’ confidence in stocks. However, it looks like this holiday season may continue to be lackluster. With a mediocre start to shopping last weekend, many retailers have cut their sales and profit outlooks. Wal-Mart Stores Inc. climbed 18 cents to $53 despite reporting November sales that rose just 0.7 percent in November, matching reduced expectations.
Declining issues outnumbered advancers by more than 4 to 3 on the New York Stock Exchange, where volume came to 1.78 billion shares, compared with 1.77 billion on Wednesday.
The Russell 2000 index of smaller companies was down 1.18, or 0.18 percent, at 642.51.
Overseas, Japan’s Nikkei stock average surged 1.75 percent. In Europe, Britain’s FTSE 100 closed up 0.33 percent, France’s CAC-40 gained 0.39 percent for the session, and Germany’s DAX index climbed 0.73 percent.