Stocks trim losses but stay in the red
Major gauges recover some ground but worries about slowing economy persist; inflation jitters back; oil lower.
NEW YORK (CNNMoney.com) -- Stocks trimmed losses near midday Thursday, recovering from a shaky morning dictated by a weak read on factory orders, a jump in a key inflation gauge and some ho-hum October retail sales.
The Dow Jones industrial average (down 19.45 to 12,011.57, Charts) lost 0.3 percent roughly 2-1/2 hours into the session. The broader S&P 500 (down 1.51 to 1,366.30, Charts) index lost a few points and the tech-fueled Nasdaq composite (down 0.22 to 2,334.13, Charts) edged lower.
Stocks have slipped for two sessions, with investors taking profits on the recent rally in response to a series of weak economic reports.
The same trend seemed to emerge Thursday morning. But the tone of the market improved as the morning wore on, thanks in part to falling oil prices, which tend to support investor sentiment and stock gains.
"Retail reports were not great this morning, the economic news wasn't so good, but yet we seem to be trying to come back here," said Joseph Saluzzi, co-head of equity trading at Themis Trading.
Saluzzi said that the market's recovery attempt was important after Wednesday's big selloff. Should stocks move higher throughout the afternoon, that would be a positive indication that the recent declines were a one or two day hiccup, rather than something more substantial, he said.
An early read on third-quarter productivity came in unchanged, versus forecasts for a rise of 1.1 percent.
Unit labor costs, the report's inflation component, jumped 3.8 percent, topping forecasts and reviving concerns about wage inflation.
Another report showed September factory orders rose 2.1 percent, missing expectations for a rise of 3.6 percent. Orders fell 0.3 percent in the previous month.
A separate report showed a bigger-than-expected jump in weekly jobless claims.
Investors also eyed sluggish October sales from big retailers.
Among the standouts, Wal-Mart Stores (down $0.79 to $48.06, Charts) said sales at stores open at least a year, known as same-store sales, rose just 0.5 percent in the month. That was lower than the company's recently reduced forecast for growth of 1 percent. Shares fell 1.8 percent.
Chico's FAS (down $1.94 to $21.31, Charts) reported a 4.1 percent drop in sales and cut its earnings forecast to a range that's below analysts' forecasts. Shares of the women's clothing retailer fell 8 percent in active New York Stock Exchange trading.
Gap (down $1.22 to $19.42, Charts) said sales fell 7 percent, versus analysts' expectations for a decline of 2.4 percent. Following the news, Citigroup (Charts) downgraded the stock to "hold" from "buy."
Market breadth was negative. On the New York Stock Exchange, losers topped winners by more than nine to seven on volume of 700 million shares. On the Nasdaq, decliners beat advancers four to three on volume of 800 million shares.
U.S. light crude oil for December delivery fell 51 cents to $58.20 a barrel on the New York Mercantile Exchange.
In currency trading, the dollar fell against the euro and was little changed against the yen.
COMEX gold for December delivery added $5.40 to $624.70 an ounce.