Stocks stumble after rally
Wall Street edges back a bit after a two-day advance as oil prices rise. Sears earnings tumble, while E*Trade gets some cash.
NEW YORK (CNNMoney.com) -- Stocks slipped Thursday morning, with rising oil prices and another weak reading on home sales giving investors a reason to backtrack after a two-day rally that lifted the Dow industrials by nearly 550 points.
The Dow Jones industrial average (Charts) lost 0.4 percent in the early going, after having risen 546.01 points in the previous two sessions, the best two-day run on a point basis since October 2002.
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 if his speech affirms what was said by Kohn.
Plunging oil prices helped the advance Wednesday. But on Thursday, oil prices rebounded, following a pipeline explosion in the Midwest. U.S. light crude for January delivery jumped $1.95 to $92.57 a barrel on the New York Mercantile Exchange. (Full story).
In other news, October new home sales rose from a revised reading on the previous month, but the results were still short of expectations.
Another report showed that the economy grew at the best pace in four years in the third quarter, according to a revised reading of growth during the period released Thursday morning. (Full story).
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 8 percent and topped the Nasdaq's most-actives list.
The rising oil prices dragged on fuel-dependant companies such as airlines, truckers and railroads. That sent the Dow Jones Transportation (Charts) average by 0.8 percent.
Treasury prices rallied, after sliding for the last two sessions. The rally sent the yield on the 10-year note to 3.95 percent from 4.03 percent late Wednesday.
In currency trading, the dollar gained versus the euro and yen.
COMEX gold for February delivery tumbled $2.30 to $805 an ounce, falling along with other dollar-traded commodities.