|
NEW YORK (CNNMoney.com) -
The Dow industrials slipped Thursday, and the broader market inched lower amid a spike in oil prices, selling in General Motors and weakness in chip stocks ahead of Intel's midquarter update, released after the close.
The Dow Jones industrial average (down 55.79 to 10,755.12, Charts) lost 0.5 percent and the Nasdaq composite (down 5.55 to 2,246.46, Charts) lost almost 0.3 percent. The S&P 500 (down 1.53 to 1,255.84, Charts) index closed just a few points lower.
U.S. light crude oil for January delivery jumped $1.45 to settle at $60.66 a barrel on the New York Mercantile Exchange.
The three major gauges swayed on both sides of unchanged through the early afternoon as investors weighed weak forecasts on the housing market and a spike in oil prices, which proved both troublesome for investor sentiment but helpful for oil stocks.
The tone turned more negative in the midafternoon as investors took a "sell the news" reaction to National Semiconductor's midday earnings report and bailed out of Intel ahead of its midquarter update, released after the close.
"I think higher energy prices might have given us the excuse to correct today, but overall, the market remains healthy," said Paul Rabbit, president at Rabbit Capital Management.
"If we can hold where we are or even dip 2 or 3 percent over the next week, I think that would be fine after the advance we've seen," he added.
After the close, chip leader Intel narrowed its current-quarter revenue forecast to a range that sets the midpoint below analysts' forecasts. Intel (down $0.45 to $25.70, Research) shares fell 1.7 percent during the regular session and lost another three percent after the close.
Friday brings reads on consumer sentiment and wholesale inventories.
The preliminary read on December consumer sentiment from the University of Michigan is expected to show a rise to 85 in the month, according to Wall Street economists, from 81.6 last month.
Wholesale inventories are expected to have risen 0.5 percent in October, after rising 0.6 percent in September.
Stocks slipped Wednesday, with the recent rally losing some steam as strong economic news sent bond yields spiking, along with fears about higher interest rates. The pullback was part of a broader retreat after a more than month-long advance.
The market has not been responding to positive news lately because of concerns about next week's Fed policy meeting and options expirations, said Peter Cardillo, chief market analyst at S.W. Bach & Co.
"I think the fear that perhaps the Fed won't stop raising rates soon has caused worries, causing the 10-year note to rise" and sparking computer-driven sell programs to kick in.
Those concerns remained in place Thursday.
What moved?
Market breadth was positive. On the New York Stock Exchange, winners beat losers nine to seven on volume of 1.66 billion shares. On the Nasdaq, decliners topped advancers eight to seven on volume of 1.94 billion shares.
In addition to Intel, other Dow decliners included IBM (down $1.22 to $87.50, Research), Merck (down $0.61 to $29.68, Research), Walt Disney (down $0.35 to $25.05, Research) and General Motors (down $1.04 to $22.00, Research), which sank 4.5 percent.
Around midday, National Semiconductor (down $0.40 to $27.28, Research) reported higher quarterly earnings and revenue that topped estimates. However, investors focused on the current-quarter forecast, which was for flat to down revenue and sent the stock lower.
Texas Instruments (down $0.93 to $32.63, Research) said late Wednesday that current-quarter earnings and revenue would hit the high end of its previous range on strong demand for its mobile phone chips. But investors focused on TI's weaker-than-expected earnings per share forecast and shares slid.
Thursday morning, wireless chipmaker Qualcomm (down $0.79 to $44.21, Research) said fiscal first-quarter revenue would come in at the high end of its previous forecast, due to strong chip shipments. Shares slipped.
A rise in the price of oil lifted oil stocks, sending the Philadelphia Oil Service (up 6.32 to 190.22, Charts) index up 3.4 percent. All 15 components advanced, led by Tidewater (up $2.35 to $49.10, Research), which gained 5 percent.
Wal-Mart's vice chairman said that the company has seen a strong holiday season so far and that it expects big sales in the days leading up to Christmas. Wal-Mart (down $0.05 to $47.70, Research) shares ended little changed.
Housing stocks fight back
The housing sector showed surprising resilience, despite some dour forecasts.
Toll Brothers (up $1.25 to $35.55, Research) reported strong quarterly earnings but warned that fiscal 2006 results may miss Wall Street forecasts due to uncertainty about the economy and expectations for a slowdown in the housing market. As a result, the company said fiscal 2007 earnings could beat or miss earlier forecasts.
But Toll shares gained.
Competitor Hovnanian (up $0.04 to $48.77, Research) also reported strong quarterly earnings and cautioned that the housing market looks to be slowing. Shares were little changed.
Finally, a UCLA report forecast a slowdown in housing over the next few years and that it will hurt the labor market and the broader economy. (Full story)
Nonetheless, a variety of housing stocks gained, sending the Dow Jones Home Construction (up $13.33 to $918.81, Research) index up 1.5 percent.
In other news, the number of Americans filing new claims for unemployment showed a surprise rise last week, according to a morning report.
Treasury prices rose after two down sessions, lowering the yield on the 10-year note to 4.46 percent from 4.51 percent late Tuesday. Treasury prices and yields move in opposite directions.
The dollar fell versus the euro and yen.
COMEX gold for December delivery rose $5 to settle at $519.30 an ounce.
|
