Dow dips on retail, housing woes

Blue chips struggle after mixed retail sales, warnings from several mortgage lenders; tech-fueled Nasdaq trims losses; oil prices rise.

By Alexandra Twin, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- Blue chips dipped Thursday afternoon on revived housing market concerns, but the broader market was mixed as investors eyed January retail sales, higher oil prices and the latest earnings reports.

The Dow Jones industrial average (down 42.78 to 12,624.09, Charts) lost about 0.3 percent with 2 hours left in the session. The blue-chip barometer had touched a record trading high Wednesday. The broader S&P 500 (down 2.87 to 1,447.15, Charts) index slid about 0.2 percent, after ending the previous session at a fresh 6-1/2-year high.

The Nasdaq (down 2.56 to 2,487.94, Charts) composite was barely lower, recovering from morning declines.

Thursday brought an onslaught of January retail sales, which ran the gamut from weak to strong, suggesting a decent, but not remarkable post-Christmas period for the nation's chain stores.

In addition, concerns about the impact from the collapse in the housing market were revived. Toll Brothers warned about its quarterly revenue and HSBC Bank and New Century Financial warned about problems resulting from defaults on home loans.

The housing and loan concerns were "putting a bit of a scare into investors" Thursday, said Todd Salamone, senior vice president of research at Schaeffer's Investment Research.

However, he said any stock weakness resulting from revived worries about the housing sector today will soon pass, since a lot of those concerns aren't new and have been factored into the market already.

"We have some selling today, but it's nothing to get worried about," Salamone said, as the positive factors that have supported stocks for months remain in place.

Tech stocks had rallied Wednesday and that sector again showed some momentum Thursday afternoon, with strength in Internet and computer hardware shares helping to keep the Nasdaq near the unchanged line.

Among the standouts, discount retailer Costco Wholesale (down $0.37 to $56.76, Charts) posted a smaller-than-expected rise of 2 percent in same-stores sales, a retail measure of sales at stores open a year or more. Shares slipped 1 percent

Limited Brands (down $0.18 to $29.11, Charts) posted a strong 11 percent rise in sales, but shares inched lower nonetheless.

Clothing retailer Gap (up $0.58 to $19.83, Charts) posted flat same-store sales, versus a decline a year ago. That sent the stock about 3 percent higher.

Housing, financial sectors hit

In other news, Toll Brothers (down $1.04 to $33.39, Charts) warned that first-quarter homebuilding revenue and orders will fall sharply, and that it will take substantial write downs related to land it optioned for development but now is walking away from, due to the housing slump.

A number of home building stocks declined in tandem, including Lennar (down $1.35 to $53.71, Charts) and Centex (down $1.28 to $51.80, Charts).

In addition, New Century Financial (down $9.15 to $21.01, Charts) warned that it didn't account correctly for some of the home loans it had to buy back, sending shares 28 percent lower.

HSBC Bank (down $2.31 to $89.91, Charts) warned that its bad debt charge for last year would be higher than expected, due to problems with its U.S. mortgage lending, sending shares lower.

A number of mortgage lenders and other financial stocks declined.

In other news Walt Disney (down $0.18 to $35.30, Charts) reported quarterly sales and earnings late Wednesday that rose from a year ago and topped estimates. Yet, shares declined in the afternoon, giving back morning gains.

EMC (up $0.95 to $14.56, Charts) rallied 8 percent in active New York Stock Exchange trading after the computer data storage company said it will spinoff roughly 10 percent of VMware, its computing virtualization unit.

Market breadth was negative. On the New York Stock Exchange, decliners topped advancers 9 to 7 on volume of 1.04 billion shares. On the Nasdaq, losers beat winners by a narrow margin on volume of 1.36 billion shares.

U.S. light crude oil for March delivery rose $1.04 to $58.75 a barrel on the New York Mercantile Exchange.

Treasury prices rose, lowering the yield on the benchmark 10-year note to around 4.72 percent down from nearly 4.74 percent late Wednesday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar rose versus the yen and slipped versus the euro.

COMEX gold rose $5.60 to $662.90 an ounce.


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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.