Major Stock Indexes End Mixed
Wall Street’s momentum sagged Thursday, leaving the major indexes mixed after investors’ enthusiasm over a six-year low in unemployment claims and strong corporate earnings waned in the face of longer-term economic worries.
With lingering questions remaining about the health of the economy, interest rates, oil prices and geopolitics, investors took profits in late trading, particularly in the energy and technology sectors that have led the most recent rallies.
“Most companies have already reported their [2005] earnings, and I think we’re getting to a quiet period where it can be tough to keep anything positive going,” said Hans Olsen, chief investment officer at Bingham Legg Advisers. “There’s still a lot out there to deal with.”
Although weekly first-time jobless claims rose slightly, Wall Street was initially encouraged after the Labor Department said the four-week moving average of claims, a strong indicator of the labor market’s health, fell to its lowest level since April 2000.
Positive earnings reports from Best Buy and Aetna also cheered would-be buyers for much of the session.
But sellers took over in the final two hours of trading.
The Dow Jones industrial average ended with a gain of 24.73 points, or 0.2%, to 10,883.35. The Dow had jumped 108 points Wednesday.
Broader stock indicators were lower. The Standard & Poor’s 500 eased 1.87 points, or 0.2%, to 1,263.78, and the tech-focused Nasdaq composite lost 11.11 points, or 0.5%, to 2,255.87.
The Russell 2,000 index of smaller companies dropped 0.4% to 718.16.
Advancing issues barely outnumbered decliners on the New York Stock Exchange.
The yield on the 10-year U.S. Treasury note fell as the first auction of 30-year T-bonds since 2001 was well received. Bond yields fall as their prices rise. The yield on the 10-year note was 4.54%, down from 4.59% on Wednesday. The new 30-year bonds were sold at a yield of 4.53%.
Crude oil futures edged higher after the Energy Department said U.S. oil stockpiles fell last week, although gasoline supplies were up sharply. A barrel of light crude settled at $62.62, up 7 cents, in New York trading.
In other market highlights:
* Electronics retailer Best Buy jumped $4.13, or 8.5%, to $52.96 for the best performance in the S&P; 500. The company raised its profit forecast for the fiscal fourth quarter ending Feb. 25 on sales of flat-panel televisions and iPod digital music players. Best Buy expects per-share profit from continuing operations of as much as $1.30, up from previous guidance of as much as $1.16.
3M, which makes film for flat-panel screens, rose $1.12 to $72.12.
* Aetna climbed $3.15 to $99.27. It said 2006 earnings, excluding some items and before stock-option expenses, would be $5.57 to $5.63 a share, compared with an earlier estimate of $5.45 to $5.50. The forecast doesn’t reflect a 2-for-1 stock split that will take effect this month. Fourth-quarter profit rose 41% to $423 million as Aetna added more customers to its medical plans.
* Two initial public offerings -- Morton’s Restaurant Group and NightHawk Radiology Holdings -- got off to a strong start. Chicago-based Morton’s, which operates 69 upscale steakhouses, closed at $17.90 a share on the NYSE, up 5.3% from its IPO price of $17 a share. The stock rose as high as $20.25.
NightHawk Radiology closed at $20.65 on Nasdaq, up 29% from its IPO price of $16. NightHawk, based in Coeur d’Alene, Idaho, operates in a new segment of medical services: teleradiology. The company provides night and weekend emergency-room services to hospitals by sending images to Australia and Switzerland, where they are read by radiologists.
Exco Resources of Dallas, which acquires and develops natural gas and oil properties in North America, also began trading Thursday. Shares closed at $13.05 on the NYSE, essentially flat with the IPO price of $13 a share.
* Marriott International was up $1.53 to $67.64. Excluding some costs, the largest U.S. hotel company forecast 2006 profit of as much as $3.18 a share, 8 cents more than an October forecast, while analysts in a Thomson Financial survey expected $3.06. Fourth-quarter profit jumped 25% on an increase in business travel in the U.S. and Asia.
* Apple Computer, maker of the iPod as well as Macintosh computers, lost $3.86, or 5.6%, to $64.95. The shares are down 9.7% this year after more than doubling in 2005 amid surging demand for iPods. Some analysts have predicted a slowdown in Apple’s computer sales while it completes a transition to Intel chips.
* European stock markets were broadly higher, adding to their recent gains, amid optimism about corporate mergers and earnings. The German DAX index surged 1.4% to 5,743.68, a fresh 4 1/2 -year high. Britain’s main index also hit a 4 1/2 -year high, rising 1.5%. So far this year a Bloomberg News index of 500 European blue-chip stocks is up 4.8% in local currencies and is up 6.1% in dollars. By contrast, the S&P; 500 is up 1.2% this year.
