Nasdaq makes it 3 for 3
Tech-fueled index gains for third session, but broader market stalls ahead of Friday's jobs read.
By Alexandra Twin, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) - The Nasdaq jumped Thursday, rising for the third straight session, but the broader market was mixed as investors mulled Friday's key December jobs report.

The Nasdaq composite (up 13.41 to 2,276.87, Charts) rose 0.6 percent, due to strength in chip and Internet stocks.

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The Dow Jones industrial average (up 2.00 to 10,882.15, Charts) and the broader S&P 500 (up 0.02 to 1,273.48, Charts) index both ended near unchanged.

Mostly upbeat retail sales, gains in tech and a slide in oil prices all provided a strong floor for stocks Thursday. However, jitters about the employment report tempered the positives, keeping the market mixed.

Friday brings the December employment report, which is expected to show that employers added roughly 200,000 jobs to payrolls last month, according to a consensus of economists surveyed by Briefing.com. Employers added 215,000 jobs in November.

Investors are likely in 'wait and see' mode ahead of that, said Art Hogan, chief market analyst at Jefferies & Co.

Hogan noted that a number that is strong but not too strong would probably be best received by the market, while a number that was much higher than forecasts could make investors nervous that perhaps the Fed won't be able to stop raising rates as soon as has been hoped. (Full story).

Bets that the central bank's 18-month rate-hiking campaign is drawing to a close energized the market in the first few sessions of 2006, but the trade was a bit more sluggish Thursday, with only the Nasdaq managing gains.

But the trade was a bit more sluggish Thursday, with techs the main gainers, even amid broadly positive forces, such as lower oil prices and the first wave of mostly upbeat.

Friday's job numbers is relevant and will certainly guide trade Friday, but the December number is trailing, and the market likes to look ahead, said Ted Weisberg, an NYSE floor trader at Seaport Securities.

"The two most important factors that continue to influence the market to a large degree are the direction of interest rates and the price of oil," Weisberg said.

"If we can get some relief on both, that should translate into a better environment for stocks," he said. "If not, we'll stay in the same trading range that we've been in for the last 12 or 18 months."

After the close Thursday, Take Two Interactive Software (Research) reported quarterly earnings that were short of forecasts and warned that first-quarter results would miss estimates. Shares slumped 6 percent in after-hours trade.

What moved?

A number of big tech issues rose, notably Cisco Systems (up $0.50 to $18.35, Research), Oracle (up $0.17 to $12.79, Research) and JDS Uniphase (up $0.08 to $2.58, Research).

Microsoft (up $0.02 to $26.99, Research) shares were little changed even after Chairman Bill Gates unveiled a competitor to Apple (down $0.59 to $74.38, Research)'s iTunes at the annual consumer electronics show in Las Vegas.

Chip stocks were higher across the board, with all 19 components of the Philadelphia Semiconductor (up 11.85 to 508.54, Charts) index rising, pushing the SOX up about 2.4 percent.

Among chip stocks moving on specific news, Xilinx (up $1.62 to $28.55, Research) jumped 6 percent after boosting its third-quarter revenue guidance on strong global sales.

InfoSpace (up $0.90 to $25.40, Research) and eBay (up $1.37 to $45.88, Research) were among the Web stocks boosting the Goldman Sachs Internet (Charts) index.

A slew of home building stocks rose, lifting the Dow Jones Home Construction (up $19.96 to $968.07, Research) index by more than 2 percent.

Walt Disney (up $0.42 to $24.41, Research) shares rose around 1.8 percent following a bullish note on the company from a Merrill Lynch analyst. Disney shares lost 2 percent in the last hour of Wednesday's session, amid rumors that it was looking to buy estranged partner Pixar, which Disney denied.

Dow 30 component General Motors (up $1.11 to $20.52, Research) rose 5.7 percent -- bouncing back from a recent drubbing. Among the factors lifting the stock: reports of strong 2005 sales in Asia and upbeat comments from the automaker's top marketing executive in a published interview.

On the downside, Dow component Boeing (down $0.84 to $70.33, Research) slipped 1.2 percent after Banc of America Securities downgraded the stock to "neutral" from "buy" due to valuation, Reuters said. Boeing was the Dow's best-performing stock in 2005.

The Dow's other big losers were Wal-Mart, Home Depot (down $0.40 to $40.08, Research) and 3M (down $0.72 to $77.99, Research).

A slew of oil stocks slumped along with the price of the raw commodity. The Philadelphia Oil Service (Charts) index lost two percent.

Retailers in motion

A number of retailers were active after the chains reported mostly upbeat December sales -- Wal-Mart being the notable exception.

Both Aeropostale (up $2.01 to $29.71, Research) and American Eagle Outfitters (up $1.21 to $24.01, Research) shares jumped after the two teen clothing sellers reported higher-than-expected December same-store sales, or sales at stores open a year or more.

Men's Warehouse (up $4.08 to $33.25, Research) jumped 14 percent after saying year-over-year sales rose 8.1 percent.

Less upbeat was Wal-Mart Stores (down $0.63 to $45.69, Research), which reported a rise of 2.2 percent in its December same-store sales, short of some forecasts.

The world's biggest retailer also said fourth-quarter profit would come in near the lower end of its previous forecast of 82 cents to 86 cents. The stock fell 1.4 percent.

Kohl's (down $3.04 to $43.94, Research) slid about 6.5 percent after the department store chain warned that fourth-quarter earnings will fall in a range below previous estimates, due to sluggish sales for the November-December period.

Market breadth was positive. Winners beat losers six to five on the New York Stock Exchange, where 1.77 billion shares changed hands. Advancers edged decliners eight to seven on the Nasdaq, where volume hit 1.93 billion.

Investors also took in the weekly jobless claims report, showing a drop to the lowest level in five years and a separate report of growth in the services sector.

U.S. light crude oil for February delivery fell 63 cents to settle at $62.79 a barrel on the New York Mercantile Exchange.

Treasury prices were little moved, with the yield on the 10-year note holding at around 4.35 percent, unchanged from late Wednesday.

The dollar was little changed versus the euro and fell versus the yen.

COMEX gold for February delivery slipped $7.80 to settle at $527.80 an ounce. Top of page

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