Stocks Fall on Rise in Initial Jobless Claims
Wall Street lost ground Thursday, unable to maintain the momentum from the previous day’s powerful rally.
Some investors may have been taken aback by a surprising rise in new claims for unemployment benefits, analysts said.
The Dow fell 43.63 points, or 0.4%, to end at 10,694.07. The blue-chip index had surged 123.85 points Wednesday to a 32-month high after Federal Reserve Chairman Alan Greenspan made generally upbeat comments on the economy.
The Standard & Poor’s 500 index ended down 5.65 points, or 0.5%, at 1,152.11 Thursday.
The technology-focused Nasdaq composite index fell 16.05 points, or 0.8%, to 2,073.61. It had lagged other indexes in Wednesday’s rally and fell more than most indexes on Thursday.
Four stocks fell for every three that rose on the New York Stock Exchange.
The number of Americans filing first-time applications for unemployment benefits increased by 6,000 to 363,000 in the week ended Saturday, the Labor Department said. The figures are the highest since 375,000 in the week ended Dec. 6.
Storms in parts of the U.S. have caused temporary layoffs at construction and other companies, a government spokesman said.
Still, the claims report dented some of the investor optimism that pushed stocks higher on Wednesday, when Greenspan told a House committee that economic growth would pick up along with employment, while inflation would stay low.
The Fed chief largely reiterated that same message to a Senate committee on Thursday.
“We’re at a stage where we should be seeing sustainable signs of growth,” said Charles Stutenroth, a money manager at Fort Washington Investment Advisors in Cincinnati.
In other markets Thursday, prices of longer-term Treasury bonds fell slightly after the final leg of the government’s quarterly debt auction didn’t go as well as hoped.
The $16 billion in new 10-year notes went at a yield of 4.06%. The bid-to-offer ratio was 2, above the 1.83 average for 2003 but below the ratios at this week’s three-year and five-year note sales.
The bid-to-offer ratio measures the dollar volume of bids relative to the amount of bonds sold.
Though bidding was weaker than expected for the 10-year T-note, analysts said demand from a key investor group -- foreign central banks -- was strong.
The dollar moved up from its lowest level in a month against the euro in New York after a report showed the German economy expanded less than predicted and the French central bank cut its growth forecast.
The stock market will be open for a full session today, but will be closed on Monday in observance of Presidents Day.
Among Thursday’s market highlights:
* No. 2 computer maker Hewlett-Packard was the Dow’s biggest percentage loser -- falling 3.9%, or 93 cents, to end at $22.91 -- after saying first-quarter profit would not beat Wall Street’s forecast.
Elsewhere in the tech sector, Intel lost 25 cents to $30.74, Microsoft eased 20 cents to $26.95 and Cisco Systems was down 19 cents to $24.05.
* El Segundo-based Computer Sciences, which manages computers for corporate clients, fell $3.75 to $42.87 after the company said quarterly profit may miss estimates.
* McGraw-Hill, owner of Business Week magazine, lost $3.49 to $76.63. A Morgan Stanley analyst said the stock was expensive compared with rivals, based on a 2005 profit estimate.
* Walt Disney continued to climb in the wake of Comcast’s takeover bid. Disney rose 40 cents to $28 while Comcast fell $1.17 to $30.06. Among other media giants, Viacom Class B dropped $1.23 to $39.94, Time Warner lost 44 cents to $17.43 and News Corp. slipped 19 cents to $38.41.
Market Roundup, C6-7
