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Markets & Stocks
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Blue chips end higher
Economic, retail sales data aid Dow's charge. Nasdaq closes down less than a point.
August 7, 2003: 7:08 PM EDT
By Meghan Collins, CNN/Money Staff Writer

NEW YORK (CNN/Money) - The Dow stumbled higher and the Nasdaq was little changed Thursday, after stocks waffled throughout the session.

The Dow Jones industrial average (up 64.71 to 9126.45, Charts) and the Standard & Poor's 500 index (up 7.04 to 974.12, Charts) each rose 0.7 percent, while the Nasdaq composite (down 0.50 to 1652.18, Charts) lost less than one point.

"We're in the midst of a technical correction, and I suspect for the next week or so we'll trade within this range," said Peter Cardillo, director of research at Global Partners Securities. "The market has already discounted a lot of the economic and earnings news."

Traders said they expect the market to trade sideways for the remainder of the summer, without an unexpected catalyst like a surprise economic report, an unexpected event in Iraq, or a sharp rise or drop in interest rates.

While investors continue to keep a watchful eye on economic reports, they need more solid evidence that the economy is growing at a faster pace before jumping more forcefully into equities, traders said. Stocks rallied in the first half of 2003 on investors' faith that an economic recovery would emerge in the second half of the year. But as the traditionally slow summer months took hold, the rally fizzled.

Thursday's reports showing a better-than-forecast drop in jobless claims and greater pickup in productivity weren't enough to inspire strong buying. But coupled with rises in monthly sales of many retail chains, the news helped to dampen selling pressure.

With a lack of economic reports or quarterly results by market heavyweights Friday, stocks could continue to trade in a tight range. Investors may chose to bide time until the Federal Reserve's meeting on interest rates next week. Most economists think the Fed will leave interest rates unchanged at Tuesday's meeting.

Retail sales add lift

Morning reports Thursday from the nation's chain stores showing an overall rise in sales in July helped boost the sector and broad market.

Wal-Mart Stores (WMT: up $1.26 to $57.00, Research, Estimates) shares jumped 2.3 percent, buoying the Dow, after the retailer said its sales at stores open at least 12 months, or same-store sales, rose 4.6 percent in July, beating its forecast. The company also said sales would grow 3 to 5 percent in August and raised its second-quarter outlook.

Meanwhile, women's clothing retailer Ann Taylor (ANN: up $1.55 to $30.85, Research, Estimates) gained 5.3 percent on a 7.6 percent same-store sales increase. Gap (GPS: up $0.45 to $18.16, Research, Estimates) shares lifted 2.5 percent after the company posted a same-store sales rise of 9 percent.

Best Buy (BBY: up $5.81 to $46.49, Research, Estimates) also encouraged the bulls, jumping 14.3 percent after raising its profit estimate for second-quarter earnings.

Energy stocks also added a lift. Rowan (RDC: up $1.30 to $23.20, Research, Estimates), jumping 6 percent, Nabors Industries (NBR: up $1.97 to $37.34, Research, Estimates), rising 5.6 percent, and Baker Hughes (BHI: up $1.53 to $32.65, Research, Estimates), up 5 percent, were among the sector's biggest gainers.

In other corporate news, Hewlett-Packard (HPQ: down $0.58 to $19.31, Research, Estimates) weighed on the tech sector, losing 3 percent, after Goldman Sachs cut its earnings-per-share estimates for the third quarter.

R.J. Reynolds (RJR: down $1.21 to $33.14, Research, Estimates) sank 3.5 percent and pulled down the tobacco sector in afternoon trading after Moody's Investors Service downgraded its long-term debt rating.

Economic reports add little

Positive economic reports in early trading had only weak impact on investors.

"The news is all positive, but it was what the market had built in," said John Hughes, market analyst at Shields & Co. "There was nothing spectacular about the numbers. The market is still in a correction phase, and it will continue for the next four or five weeks -- at least through Labor Day."

Before the opening bell, the government said initial claims for unemployment benefits fell for the third week in a row, dropping to 390,000 from a revised 393,000 in the previous week. The number of weekly jobless claims remained under the key 400,000 mark, signifying expansion in the labor market -- and the decline was better than economists' forecast of a rise to 395,000.

Separately, a preliminary reading on second-quarter non-farm productivity rose 5.7 percent from 1.9 percent in the first quarter and better than Wall Street's expected 4.1 percent gain, on average, according to Briefing.com.

The government also said June wholesale inventories were flat, compared with a 0.3 percent gain in the prior month and in line with Wall Street expectations.

Late in the trading session, the Federal Reserve said the amount of consumer debt unexpectedly declined by $400 million in June.

Meanwhile, fairly light volume caused some volatility in the markets, where breadth was mixed Thursday. Advancing stocks overtook decliners on the New York stock exchange 5 to 4 as 1.4 billion shares changed hands. On the Nasdaq, losers edged past winners 8 to 7 as 1.6 billion shares traded.

European markets ended mixed Thursday. Most Asian-Pacific stock markets closed higher. (Check the latest on world markets.)

Treasury prices rose after the Treasury's 10-year note auction. The 10-year note yield slipped to 4.21 percent from 4.27 percent late Wednesday.

The dollar sank against the yen and also lost ground versus the euro.

Light crude oil futures rose 69 cents to $32.39 a barrel in New York, where gold jumped $1.70 to $354.10 an ounce.  Top of page




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.