Stocks Ease Off the Lows of the Day

Any enthusiasm Obama bolstered was offset by the retail squeeze. Wal-Mart (WMT Quote) said December same-store sales were worse than Wall Street expected and reined in its fourth quarter guidance, while Macy's (M Quote) said it will close underperforming stores.

Target (TGT Quote)and Costco(COST Quote) said same-store sales fell about 4%. Gap (GPS Quote) said December sales fell 12%, and Abercrombie & Fitch (ANF Quote) said sales slumped 18% and same-store sales took a 24% hit.

A bright spot, Sears (SHLD Quote) shares added 19% after the company forecast quarterly profit above Wall Street estimates.

Elsewhere, the number of U.S. workers remaining on jobless rolls hit a new 26-year high. But the number filing new claims for unemployment benefits fell by 24,000 to a seasonally adjusted 467,000 last week, much better than the expectation for 545,000.

The Labor Department said the largest increases in initial claims for the week ending Dec. 27 were in Wisconsin, Michigan, Kansas, Massachusetts and New Jersey.

The government will release non-farm payroll figures Friday, perhaps the most anticipated data of the week, with expectations for a drop of 500,000. But a report issued by ADP Employment Service on Wednesday forecast that private-sector employment fell by 693,000 in December, suggesting the nonfarm payroll numbers will have declined much more severely than expected.

The unemployment rate, as computed by the Labor Department, was 6.7% in November, and is expected to rise to 7% for December.

If you add in workers in part-time positions who cannot find full-time employment, the hidden unemployment rate is about 13%, according to Peter Morici, a professor at the University of Maryland School of Business and former chief economist at the U.S. International Trade Commission.