FOX Business: The Power to Prosper
The bulls on Wall Street took a quasi-breather on Thursday as the Dow’s four-day win streak came to a halt amid subpar retail sales figures and the tumbling euro, but rallying tech stocks nudged the Nasdaq Composite slightly higher.
The Dow Jones Industrial Average fell 25.58 points, or 0.22%, to 11697.31, the Standard & Poor's 500 sank 2.71 points, or 0.21%, to 1273.85 and the Nasdaq Composite added 7.69, or 0.28%, to 2709.89. The FOX 50 lost 1.74 points, or 0.19%, to 913.43.
The deadlock on Wall Street backed the blue chips away from newly-hit two-year highs, but allowed the Nasdaq Composite to land at a level unseen since December 2007.
“We’re dealing with two markets," said Michael James, managing director of equity trading at Wedbush Securities. He singled out relative strength in tech stocks amid the kickoff to the Consumer Electronics Show in Las Vegas compared with a “pretty weak” performance from consumer-related stocks like Gap (NYSE:GPS).
The cautious action comes as traders sat on their hands ahead of Friday's crucial jobs report, which the bulls hope will confirm private-sector employers have significantly added to their payrolls in recent weeks.
Underscoring just how hot the markets have been of late, the very modest 26-point decline on the Dow marked the benchmark index's worst day since November 30. Most blue-chip stocks ended in the red, led by telecom giants Verizon (NYSE:VZ) and AT&T (NYSE:T). The index's biggest winners were Microsoft (NASDAQ:MSFT) and Boeing (NYSE:BA).
The Nasdaq Composite posted slight gains, driven by tech stocks such as Qualcomm (NASDAQ:QCOM) and Google (NASDAQ:GOOG).
Wall Street hit session lows in the late morning after the euro broke below $1.30 to its lowest level since November 30. The euro appeared to be hurt by a combination of tumbling bonds of debt-ridden European nations like Belgium and increasingly bullish sentiment about the economic prospects of the U.S. Traders pay close attention to the relationship between the U.S. dollar and the euro because a stronger greenback hurts commodity prices and tends to weigh on exports.
Commodities turned sharply negative as the euro selling picked up. Crude oil slid well below the $90 level, diving $1.92 a barrel, or 2.13%, to $88.38. Gold declined $2.00 a troy ounce, or 0.15%, to $1,371.40.
Consumer discretionary held Wall Street back as retailers revealed same-store sales growth of 3.1% in December, trailing the 3.4% rise analysts had projected. Target’s (NYSE:TGT) stock dove almost 7% after saying its same-store sales inched up just 0.9%, widely missing expectations for 4% growth.
Other retailers also revealed weaker-than-expected results, including Macy’s (NYSE:M), Gap and Costco (NASDAQ:COST). The news wasn’t all bad, however, as Limited Brands (NYSE:LTD), Buckle (NYSE:BKE) and Hot Topic (NASDAQ:HOTT) beat the Street.
Ahead of Friday's all-important jobs report, the Labor Department said jobless claims rose by 18,000 last week, backing away from levels unseen since July 2008 and slightly higher than forecasts from economists. However, the four-week average continues to head south, hitting a new two-year low. Continuing claims slid by 47,000 to 4.1 million.
The weekly report sets the stage for Friday's report, which is expected to show nonfarm payrolls grew by 175,000 in December and the unemployment rate inched lower to 9.7%. The bar has been raised in recent days for this crucial report because ADP said Wednesday private-sector jobs surged by 297,000 in December, blowing away forecasts for an increase of just 100,000.
JPMorgan Chase (NYSE:JPM) exec William Daley has been tapped by President Barack Obama to be the White House’s new chief of staff. Daley is likely to be received well on Wall Street and in the business community, which has often been at war with the White House.
Goldman Sachs (NYSE:GS) is being sued by ACA Capital over disclosure issues in the Abacus deal, FOX Business’s Charles Gasparino reported. ACA is seeking $120 million in damages from the Wall Street bank.
Facebook brought in $1.2 billion in revenue and posted net income of $355 million during the first nine months of 2010, according to a private placement memo obtained by Reuters. The disclosure was part of a controversial stock sale being offered to wealthy Goldman Sachs (NYSE:GS) clients.
Sara Lee (NYSE:SLE) is likely to split up its meats and coffee businesses into two separate businesses in the wake of rejecting Brazilian beef processor JBS’s takeover bid, The Wall Street Journal reported. JBS has not come back with a higher offer, and while it is still interested, financing may be difficult to obtain and no other suitors have emerged, the paper reported.
LinkedIn plans to go public within the next several months, the Journal reported. An S-1 filing is expected in the first quarter. Bank of America (NYSE:BAC), Morgan Stanley (NYSE:MS) and JPMorgan Chase are poised to be the initial public offering’s underwriters, the paper reported.
Walt Disney’s (NYSE:DIS) ESPN is nearing a record deal that would cost nearly $2 billion a year to receive the rights to air the National Football League’s Monday Night Football games, SportsBusiness Daily reported. The deal would reportedly represent a 40% rise in annual rights fees and run nine or 10 years.
Monsanto (NYSE:MON) swung to a fiscal first-quarter profit and posted non-GAAP EPS of 2 cents a share, slightly topping estimates. However, the seed giant projected non-GAAP EPS for fiscal 2011 of $2.69 to $2.79, lagging behind the Street’s view of $2.81.
Constellation Brands (NYSE:STZ) beat the Street with non-GAAP EPS of 66 cents, compared with calls from analysts for 62 cents. However, net sales slid 2.2% to $966 million, trailing estimates for $992.8 million.
Apple (NASDAQ:AAPL) was rebuffed after approaching Blackstone (NYSE:BX) CFO Laurence Tosi about its own CFO job, Bloomberg News reported. Apple said it is not conducting a search for a new CFO.
Germany's DAX rallied 0.60% to 6981.39, France's CAC 40 slipped less than 0.01% to 3904.42 and the U.K.'s FTSE 100 declined 0.40% to 6019.51.
In Asia, Japan's Nikkei 225 leaped 1.44% to 10529.80, Hong Kong's Hang Seng gained 0.12% to 23786.30 and China's Shanghai Composite declined 0.51% to 2824.20.