Stocks decline as jitters about retail return
A deal to help head off more mortgage foreclosures pulled Wall Street out of a slump Thursday, giving stocks a mostly higher close.
Democratic lawmakers reached an agreement with Citigroup to let bankruptcy judges alter loans in an effort to prevent homes from going into foreclosure. Other lenders are expected to follow suit.
Wall Street was down for much of the session after a profit warning from Wal-Mart Stores intensified fears that consumers are even worse off than thought. Their reluctance to spend -- evident in Thursday’s retail sales reports from many of the nation’s biggest merchants -- could make it harder for the country to recover from the recession.
The Dow Jones index ended with a modest decline while the tech-focused Nasdaq composite index rose more than 1%. Tech stocks gained on the belief that the industry would lead the market’s recovery.
“Instead of people selling into the rallies, they’re starting to buy into the dips,” said Bill Groenveld, head trader for VFinance Investments, referring to the market’s shift away from the panic that dominated trading in the fall.
The agreement between Citigroup and Sens. Richard J. Durbin (D-Ill.), Charles E. Schumer (D-N.Y.) and Christopher J. Dodd (D-Conn.) raised hopes that the steep downturn in housing that has badly hurt consumer spending and the economy could be halted.
The Dow ended down 27.24, or 0.3%, at 8,742.46 after being down as much as 119.
Broader stock indicators advanced. The Standard & Poor’s 500 index rose 3.08, or 0.3%, to 909.73, and the Nasdaq composite index rose 17.95, or 1.1%, to 1,617.01. The Russell 2,000 index of smaller companies rose 4.91, or 1%, to 502.01.
Wall Street’s fears about the economy have been focused on the job market. Economists believe the government today will report massive job losses for December. “The market has been bracing itself for a pretty grim number,” said Craig Peckham, market strategist at Jefferies & Co.
Some government bond prices rose as unease stoked demand for the safety of such debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.44% from 2.49% late Wednesday.
The dollar fell against most other currencies; gold prices rose. Light, sweet crude dropped 93 cents to $41.70 a barrel on the New York Mercantile Exchange.
Britain’s FTSE 100 slipped less than 0.1% after the Bank of England cut its official interest rate by half a percentage point to 1.5% -- the lowest level in its 315-year history.
