Stocks mixed as trading opens
The stock market paused Thursday from its recent rally despite a surprise drop in initial claims for unemployment benefits.
Lackluster quarterly results from FedEx and Oracle contributed to investors’ caution.
The Dow Jones industrial average ended with a loss of less than 8 points.
Stocks had risen for eight of the 10 last trading days before Thursday, adding to the market’s six-month-long rally on growing evidence of an economic recovery.
The Standard & Poor’s 500 index is up 57% from its 12-year low in early March, prompting many analysts to warn that share prices have risen too quickly.
On Thursday, the Labor Department said workers filing jobless-benefit claims for the first time fell to 545,000 last week from an upwardly revised 557,000 the week before. Economists had expected an increase.
It was the lowest level of initial claims since early July, suggesting job cuts might be easing.
In other economic reports, the Commerce Department said housing starts rose in August to their highest level in nine months as apartment construction jumped. The increase was just below the pace economists had forecast.
Similarly, the Federal Reserve Bank of Philadelphia’s index of regional manufacturing conditions rose for a second straight month to its highest level since June 2007. But a drop in new orders this month from August worried some investors.
The Dow fell 7.79 points, or 0.1%, to 9,783.92. On Wednesday, the Dow jumped 108 points to a high for the year.
The S&P; 500 index fell 3.27 points, or 0.3%, to 1,065.49, and the Nasdaq composite index fell 6.40 points, or 0.3%, to 2,126.75.
The Russell 2,000 index of smaller companies lost 0.3%.
About three stocks fell for every two that rose on the New York Stock Exchange.
Shares of FedEx fell 2.2%, while Oracle slipped 2.8%. The bellwether companies posted weaker sales for the three months that ended Aug. 31, stirring concerns about how revenues are holding up for companies that will report results for the quarter that ends Sept. 30. In the March-to-June quarter, companies relied on cost cutting, not revenue growth, to boost earnings.
In other market highlights:
* AMR soared 20% after the parent of American Airlines said it raised $2.9 billion in financing.
* Eastman Kodak sank 12%. The imaging company plans to raise $700 million through a deal with Kohlberg Kravis & Roberts and an offering of debt that will be convertible into stock.
* Yields on government bonds fell. The benchmark 10-year Treasury note slumped to 3.39% from 3.47% late Wednesday.
* The dollar was mixed against other currencies, while gold retreated from a record high set Wednesday.
* Oil futures fell 4 cents to settle at $72.47 a barrel on the New York Mercantile Exchange.
* Overseas, key stock indexes rose 0.8% in Britain, 0.5% in Germany, 0.6% in France and 1.7% in Japan.
