Wall Street ended an erratic session little changed Thursday as strength in energy stocks offset a weak manufacturing data and a disappointing forecast from Wal-Mart Stores Inc.
NEW YORK (AP) — Wall Street ended an erratic session little changed Thursday as strength in energy stocks offset a weak manufacturing data and a disappointing forecast from Wal-Mart Stores Inc.
Stocks found some leadership from the likes of Chevron Corp. and Exxon Mobil Corp. The big oil companies were bolstered by a five-session rally in the price of crude, which is now trading at its highest point since mid-September.
However, the markets were weighed by a disappointing reading of the Chicago Purchasing Managers index, which fell to 49.9 in November from 53.5 in October and pointed to slowing Midwest manufacturing. A reading below 50 suggests economic contraction; it was the first reading below 50 since April 2003. Investors’ concern is that the index is a precursor of the nationwide purchasing managers report to be issued Friday by the Institute for Supply Management.
Also curbing the market’s advance was Wal-Mart’s announcement that sales at stores open at least a year, an important retail benchmark known as same-store sales, would likely be flat to up just 1 percent in December. The forecast from the world’s largest retailer raised concerns about the health of consumer spending.
Analysts said some of Thursday’s trading was based on more technical factors.
“Some of what we’re seeing is a lot of people who are making a year-end play, setting themselves up for next year,” said Doug Johnston, head of U.S. trading at Boston-based Canaccord Adams. “Big investors are going to peel out the stocks that have been losers, and begin to go with the momentum trades.”
According to preliminary calculations, the Dow Jones industrial average fell 4.80, or 0.04 percent, to 12,221.93.
Broader stock indicators were mixed. The Standard & Poor’s 500 index rose 1.17, or 0.08 percent, to 1,400.65, and the Nasdaq composite index fell 0.46, or 0.02 percent, to 2,431.77.
Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.46 percent from 4.52 percent late Wednesday.
Stocks were also hurt by a weakening dollar, which fell against major currencies, though not against the Japanese yen. The British pound reached a 14-year high against the dollar amid the U.S. economic news and after Germany said the number of people out of work there fell below 4 million for the first time since 2002. Gold prices rose sharply.
Peter Schiff, president of Euro Pacific Capital Inc., is bearish on the stock market and contends Wall Street is treating the weakening dollar too lightly.
“I think there is some concern building internationally,” he said, referring to the state of the dollar. He cited a rise in the price of commodities such as gold, silver and oil.
Light, sweet crude was up 41 cents at $62.87 on the New York Mercantile Exchange. Prices have risen in recent days in part as inventories fell more than expected. The rise of oil, which is up about 7 percent in November, has pressured stocks.
Oil companies benefited to lead both the Dow and S&P 500. Chevron added $1.27, or 2 percent, to $72.32. Rival Exxon Mobil rose 78 cents to $76.81.
The Labor Department also reported that 357,000 recently laid off workers filed jobless claims last week, a higher-than-expected increase of 34,000 from the previous week. The reading was the highest level in 13 months.
In a bit of bright news, the Commerce Department said consumer spending rose 0.2 percent in October after falling the same amount in September. Wall Street has been concerned about how consumers would reconcile forces such as a cooling housing market and a drop in gas prices from earlier in the year as they head to the malls for holiday shopping.
The consumer spending data appeared to run counter to the news from Wal-Mart, which was down 79 cents at $46.10. Wall Street has been trying to determine whether the retailer’s difficulties are mostly its own or whether they reflect a broader pullback among consumers.
“We think U.S. growth is slowing but there’s no recession in sight,” Weymouth said. “Even though we’ve seen some strength, we expect a consumer slowdown but not a meltdown in 2007.”
In other corporate news, Pfizer Inc. rose 42 cents to $27.49 after raising its full-year profit forecast and said its development pipeline would produce a number of late-stage products in the coming years.
Teen clothing retailer Abercrombie & Fitch Co. posted a 3 percent decline in November same-store sales rather than a 3 percent increase as Wall Street had been expecting. Abercrombie was down $2.15, or 3.1 percent, to $67.44.
Gap Inc. fell 35 cents to $18.72 after the clothing chain showed a wider-than-expected drop in November same-store sales.
Cardinal Health Inc., which provides health care services, rose $2.79, or 4.5 percent, to $64.62 after announcing plans to sell its business that makes and packages medication for pharmaceutical and biotech companies.
CPI Aerostructures Inc., which makes aircraft parts, rose 95 cents, or 16.8 percent, to $6.59 after the company said it received a $6.9 million order from the U.S. Air Force.
Discount shoe chain DSW Inc. jumped $4.59, or 13.6 percent, to $38.30 and set a new 52-week high after raising its fiscal 2006 forecast beyond what Wall Street had been expecting.
The Russell 2000 index of smaller companies was up 1.96, or 0.25 percent, at 786.12.
Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 1.97 billion shares.
Overseas, Japan’s Nikkei stock average closed up 1.23 percent. Britain’s FTSE 100 closed down 0.59 percent, while Germany’s DAX index was down 0.86 percent, and France’s CAC-40 fell 1.00 percent.