Choppy day on Wall StreetStocks struggle in the afternoon as investors seek direction after a two-session rally. Oil prices rise and economic readings are mixed.NEW YORK (CNNMoney.com) -- Stocks struggled Thursday afternoon, as investors pled exhaustion after a two-session rally and amid higher oil prices and weak home sales ahead of a key speech from Fed chairman Ben Bernanke this evening. The Dow Jones industrial average (Charts) lost a few points with around 2 hours left in the session. The broader S&P 500 index (Charts) and the tech-fueled Nasdaq (Charts) composite both dipped around 0.2 percent. Stocks surged Wednesday after comments from Donald Kohn, the Federal Reserve's No. 2 official, suggested that the central bank will cut rates again at its next policy meeting. Fed Chairman Ben Bernanke speaks Thursday night and investors will be looking to see that his speech adds to such bets. Plunging oil prices helped the advance Wednesday. But on Thursday, oil prices rebounded, following a Minnesota pipeline explosion. (Full story). The rally in oil prices and a mix of economic news gave investors a reason to be cautious Thursday and stocks churned in a narrow range throughout the session. Stocks had rallied for two sessions, with the Dow gaining nearly 550 points as investors jumped back in after Monday's decline. On Monday, the three major gauges ended the session down by at least 10 percent off the highs hit in October, a decline that fits the technical definition of a "correction." Considering the strength of the two-day advance, stocks could have conceivably seen a bigger decline Thursday morning, so the minimal selling pressure was a positive, said Peter Cardillo, chief market economist at Avalon Partners. The market briefly turned higher following the release of the White House's 2007 and 2008 economic growth forecast, Cardillo said. Although the growth forecast for 2008 is lower than earlier predictions, it is still higher than what many economists are expecting and therefore may have given stocks a bit of a boost, he said. Other economic news was less upbeat. October new home sales were much weaker than expected and the price of new homes plunged from a month ago, according to a government report. Sales rose from a revised reading on the previous month, but the results were still short of expectations. (Full story) Another report showed that October foreclosure filings surged from a year ago. The economy grew at the best pace in four years in the third quarter, according to government info released Thursday morning. (Full story) but a separate report showed a surprisingly large rise in weekly jobless claims last week. In corporate news, E*Trade Financial (Charts) said it received a $2.5 billion cash infusion from Citadel Investment Group. The online brokerage also said its CEO was stepping down. Shares gained 4 percent and topped the Nasdaq's most-active list, giving up bigger gains from the open. But other big financial stocks slipped, retreating after leading the two-day advance. Merrill Lynch (Charts, Fortune 500), Morgan Stanley (Charts, Fortune 500), Lehman Brothers (Charts, Fortune 500) and JP Morgan (Charts, Fortune 500) were among the decliners. Sears Holdings (Charts, Fortune 500) reported sharply lower-than-expected earnings in the third quarter, citing weaker sales and clearance markdowns. Shares plunged 14 percent in active Nasdaq trade. The rising oil prices dragged on fuel-dependant companies such as airlines, truckers and railroads. That sent the Dow Jones Transportation (Charts) average down by 1.3 percent. However, oil services stocks gained, including Exxon Mobil (Charts, Fortune 500), Valero Energy (Charts, Fortune 500) and Sunoco (Charts, Fortune 500). Dell (Charts, Fortune 500) inched higher ahead of its quarterly earnings report, due out after the close of trade. Market breadth was negative. On the New York Stock Exchange, losers beat winners nine to seven on volume of 810 million shares. On the Nasdaq, decliners topped advancers four to three on volume of 1.42 billion shares. Treasury prices rallied, after sliding for the last two sessions. The rally sent the yield on the 10-year note to 3.92 percent from 4.03 percent late Wednesday. In currency trading, the dollar gained versus the euro and slipped versus the yen. COMEX gold for February delivery tumbled $4.60 to $802.70 an ounce, falling along with other dollar-traded commodities. |
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