Markets subdued ahead of holiday
Major indexes struggle to find direction amid earnings reports, economic data; tech stocks lead advancers.
NEW YORK (CNNMoney.com) -- Stocks were mixed Thursday afternoon as investors mulled strong earnings from Oracle, mixed economic data and the latest woes from the financial sector.
The Dow Jones (INDU) industrial average was down a few points with 2 1/2 left in the session. The broader S&P 500 (INX) index gained a few points. The tech-fueled Nasdaq (INX) composite gained 0.7 percent.
"There's no market-moving data today," said Michael Darda, chief economist at MKM Partners.
Investors are increasingly worried about "meltdown risk," something that Darda thinks is overstated: "we are headed for a slowdown, but I see no evidence of a recession," he said.
"The fourth quarter [of 2007] will be weakest but I see the economy picking up in the second half of 2008," he added.
From the financial sector, Bear Stearns (BSC, Fortune 500) announced a quarterly loss of $854 million, or $6.90 a share; analysts were expecting the company to report a loss of $1.79 a share. The Wall Street bank also said it would take a writedown of $1.9 billion on its mortgage securities.
Shares of Bear Sterns were down nearly 2 percent in afternoon trade.
Credit concerns have been heightened recently as bond insurers have seen their credit ratings threatened by the fallout of the subprime mortgage debacle.
Bond insurers cover interest and principal payments on the bonds they guarantee if the bond issuer defaults. Bonds backed by mortgages have become increasingly suspect as the housing market continues to deteriorate, raising questions about the bond insurer's ability to guarantee them.
Shares of MBIA (MBI), one of the largest bond insurers, were down as much as 27 percent.
In corporate news, package delivery company FedEx Corp., (FDX, Fortune 500) hurt by rising fuel costs, posted a 6 percent drop in revenue for the company's fiscal second quarter, and offered third quarter guidance that was lower than Wall Street's expectations. Shares of the courier were down 1 percent.
BlackBerry maker Research In Motion (RIMM) saw its shares rise more than 3 percent ahead of the company's earnings report due out after the market closes.
In economic news, the Commerce Department said Thursday that U.S. gross domestic product, the broadest measure of economic activity, was unchanged. The country's GDP grew at a pace of 4.9 percent in the July-to-September quarter, unchanged from an estimate made a month ago.
Meanwhile, the Conference Board said Thursday that its index of leading economic indicators, a metric of business activity, fell 0.4 percent in November, signaling the possibility of a recession next year.
Also, jobs data out Thursday from the Labor Department showed a sizeable increase in the number of people applying for unemployment benefits last week, a potential sign of growing softness in the job market.
Market breadth turned negative. On the New York Stock Exchange, losers topped winners three to two on volume of 725 million shares. On the Nasdaq, decliners beat advancers four to three on volume of 1.1 billion shares.
Treasury prices rose, lowering the yield on the 10-year note to 4.00 percent from 4.03 percent late Tuesday. Treasury prices and yields move in opposite directions.
U.S. light crude oil for February delivery rose 87 cents to $92.11 on the New York Mercantile Exchange.
In currency trading, the dollar gained versus the euro and fell versus the yen.
COMEX gold for February delivery fell $1.90 to $803.50 an ounce.