Japan Quake, Soaring Oil Weigh on Markets

FOX Business: The Power to Prosper

A 7.1 magnitude earthquake that hit off the coast of Japan and soaring oil prices pushed stocks into negative territory.

Today's Markets

The Dow Jones Industrial Average was down 17.3 points, or 0.14%, to 12,409, the S&P 500 was off 2 points, or 0.15%, to 1,334 and Nasdaq Composite was lower by 3.7 points, or 0.13%, to 2,796. The FOX 50 slipped 0.6 point to 937.

"The market was anemic at best this morning and this earthquake is just one more cause for concern that the rebound there could be in jeopardy," said Peter Kenny, managing director at Knight Capital Group. "It instills fear in the markets."

The situation at Japan's troubled Fukushima Daiichi nuclear plant appeared to be stable.  Tokyo Electric Power Company, the plant's operator, said there were no irregularities at the plant that has been shut down since March 16, but it did evacuate workers. Nikkei 225 futures tumbled more than 2.4% on news of the earthquake -- which would equate to a 300 point move on the Dow -- before coming back about one percentage point.

In energy markets, oil surpassed the $110 a barrel threshold for the first time since September 2008. Tumult in the Middle East and North Africa coupled with expectations worldwide oil demand will increase as the economic recovery gains traction has pushed prices far higher in recent months.

Light, sweet crude jumped $1.47, or 1.4%, $110.30 a barrel.  The price of gasoline at the consumer level continues rising.  A gallon of regular gas at the pump cost $3.73 on average nationwide, up from $3.52 last month and $2.84 last year.

The number of individuals applying for unemployment benefits fell to 382,000  from an adjusted 392,000 in the prior week, according to the Labor Department. Wall Street expected the number of claims to tick lower to 386,000 for the prior week.

"The continued downtrends in initial and continuing jobless claims are encouraging signs of labor market improvement ... and we expect them to persist as the overall economic expansion continues apace," wrote Barclays Capital economist Nicholas Tenev in a research note.

Generally, economists see a reading below 400,000 pointing to moderate improvement in the labor markets.  Indeed, the widely-watched unemployment rate was at 8.8% in March -- far off the October 2009 peak of 10.1%.

A slew of major retailers report sales figures for stores open at least a year Thursday. Analysts were expecting soft results for March because of rising energy prices and Easter falling later than usual.  However, many retailers managed to shrug off the downward pressure.

Costco (NYSE:COST) posted a 13% jump in comparable-store-sales, easily besting analysts' estimates of a 7.4% gain.

Target (NYSE:TGT) reported a 5.5% loss in March same-store-sales, better than the 6.4% drop Wall Street was expecting. The second-largest U.S. discount retailer also said it expects its retail margins for 2011 will be in the range of 9.7% to 10% instead of the 10.7% in the first quarter of 2010.

The European Central Bank increased interest rates from a record low 1% to 1.25% as it tries to maintain economic expansion while keeping inflation in check.

"Rising inflation and resilient growth make it more likely this is one step in a normalisation process and will be followed by further hikes,” wrote economists at RBS in a research note.

Since the monetary authority telegraphed its move far in advance, the market response has been fairly muted.  The euro traded lower by 0.2% against the U.S. dollar.

Gold was up $2.70, or 0.19%, to $1,461 a troy ounce.

Corporate News

Dish Network's (NASDAQ:DISH) $320 million purchase of bankrupt video-rental company Blockbuster was approved by a judge.

Walt Disney (NYSE:DIS) plans on breaking ground at a Disneyland Shanghai amusement park on Friday. The initial phase of construction of the 1.5 square-mile park is estimated to cost $3.7 billion.

Facebook, the world's largest social network, plans on sharing the designs of highly-efficient servers it created in collaboration with several major hardware companies.

Boeing (NYSE:BA) took 18 commercial aircraft orders in the week ended April 5, valuing $1.2 billion based on current average prices.

Bed Bath and Beyond (NASDAQ:BBBY) unveiled earnings of $1.12 a share for the fourth quarter, easily topping expectations of 97 cents. The retailer's sales also jumped to $2.5 billion from $2.2 billion in the prior quarter.

Rite Aid (NYSE:RAD) lost 24 cents a share in the fourth quarter, on $6.5 billion in revenue.  Profits were in line with analysts' expectations and revenue beat expectations by $120 million.

Jefferies Group (NYSE:JEF) agreed to buy Prudential Financial's (NYSE:PRU) commodities and derivatives division for $430 million.

IBM (NYSE:IBM) announced a new service that allows enterprises to move leverage cloud computing.

Foreign Markets

Foreign markets were mostly lower as traders digested the earthquake in Japan, the ECB rate decision and Portugal's call for financial support from the European Union.

The English FTSE 100 was off 0.56% to 6,007, the French CAC 40 fell 0.49% to 4,028 and the German DAX was down 0.5% to 7,179.

In Asia, the Japanese Nikkei 225 edged higher by 0.07% to 9,590 and the Chinese Hang Seng inched lower by 0.01% to 24,281.