Stocks in zigzag

Encouraging news on jobs and inflation countered by big losses from Citi and Merrill.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By David Goldman and Catherine Tymkiw, staff writers

What should be at the top of the next president's economic agenda?
  • Solving the credit crunch
  • Creating new jobs
  • Reducing the deficit
  • Halting the housing meltdown
  • Cutting taxes

NEW YORK ( -- Stocks seesawed early Thursday, one day after a massive selloff sent the Dow Jones industrial average to its second biggest one-day point loss.

The Dow Jones industrial average (INDU) and the Standard & Poor's 500 (SPX) index both gained around 0.7%. The Nasdaq composite (COMP) added 0.6%.

All three gauges started higher, turned lower, and went back up again - all within the first 8 minutes.

Investors were weighing Merrill Lynch and Citigroup's mixed quarterly results with better-than-expected readings on inflation and the labor market.

Stocks got hammered Wednesday as recessionary fears grew following a much weaker-than-expected retail sales report, a dismal outlook from the Federal Reserve and sobering comments from Fed chair Ben Bernanke.

"We're seeing a bounceback after a major selloff," said Peter Cardillo, chief market economist at Avalon Partners. "But there has been a lot of market turmoil recently, so we'll have to wait and see - there are a lot of worries about the economy."

While the credit markets have been signaling some modest easing this week, there are still high levels of risk aversion underpinning the markets.

Investors are hoping for any signs of good news on both the corporate and economic front and Thursday brings a slew of reports for them to chew on.

Eyes on economy. According to the latest latest reading on new unemployment filings, jobless claims fell by 16,000 to 461,000, a much greater decline than the 8,000 that a consensus of analysts surveyed by expected.

But in another sign that the job market recovery has a ways to go, the number of people collecting benefits for more than a week surged to 3.71 million- its highest level since Feb. 21, 2004.

Also, the Bureau of Labor Statistics said that the latest inflation measure was unchanged in September. Economists expected the Consumer Price Index to show a modest 0.1% increase for September. The core CPI, which excludes the volatile food and energy prices, rose just 0.1%. Economists expected that measure to come in at an increase of 0.2%.

Company news. Dozens of companies are reporting their quarterly financial reports Thursday morning, namely embattled bank Citigroup (C, Fortune 500) and investment bank Merrill Lynch (MER, Fortune 500).

Merrill Lynch reported results shortly after 6:30 a.m. ET, saying its third-quarter loss was worse than expected, largely due to $8.5 billion in writedowns related to bad mortgage debt.

Citi posted a smaller-than-expected quarterly loss at 7:00 a.m. ET, though the bank said its revenue was lower than analysts' predictions. The loss was partially due to about $12 billion in writedowns related to credit and loan losses.

"This market has already discounted bad earnings," Cardillo said. "Everyone knew earnings wouldn't be good."

Citigroup and Merrill Lynch, which is in the process of being purchased by Bank of America (BAC, Fortune 500), have racked up billions in losses over the past three quarters and were both widely expected to extend their losing streaks.

Oil and dollar. Oil prices continue to be pressured lower amid heightened anxiety over a global slowdown in demand. Prices fell below $80 a barrel Thursday, trading down 19 cents to $74.35 a barrel.

Prices have lost nearly $75, or more than 51%, since peaking at $147.27 a barrel on July 11.

At 11:00 a.m. ET, the Energy Information Administration will issue its weekly reading on crude and gasoline inventories, which was delayed a day this week due to the federal holiday Monday.

According to Platts, the energy research arm of McGraw Hill Cos., oil supplies are expected to show an increase of 3.1 million barrels, while gasoline inventories are forecast to be up 3.1 million barrels.

Meanwhile, the dollar has been on a volatile ride of late, reacting to U.S. and overseas government interventions aimed at propping up global and domestic economies. Early Thursday, the greenback was higher against the yen, but remained lower versus the British pound and the 15-nation euro. To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More

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.