Stocks Fade Into Close, With Only Dow Up
NEW YORK (
) -- Stocks reversed course and finished near their lows of the day, despite an earlier rally that pushed the
Dow
to a triple-digit gain, as eurozone nations discussed bailout measures for Greece.
The
Dow Jones Industrial Average
, which was inching closer to the 11,000 level earlier, finished up only 5 points, or 0.1%, to 10,841. After touching 52-week highs, the
S&P 500
lost 2 points, or 0.2%, to 1166, and the
Nasdaq
slipped 1 point, or 0.1%, to 2397.
According to
Reuters
, Germany and France, in concert with International Monetary Fund financing and other euro-zone parties, cobbled together an agreement to aid debt-laden Greece, but as a standby plan. Still, a separate
Reuters
report said European Central Bank President Jean-Claude Trichet disagreed with the use of IMF help.
Jim Paulsen, chief investment strategist at Wells Capital Management, said Trichet's comments were one of a few spurs that traders may have used to sell off after the sharp rise. The headline also weighed on the euro in the afternoon and gave strength to the dollar. But Paulsen added the ECB president's comments do not signal any distinct fundamental shift.
"The catalyst they used to set it off was Trichet's comments, but it really wasn't that important. It could be used to set a trend, and then the traders took over," he said. "But there is absolutely no new news content in what he said today."
Overseas, Hong Kong's Hang Seng fell 1.1%, and Japan's Nikkei ended with a gain of 0.1%. The FTSE in London added 0.8%, and the DAX in Frankfurt gained 1.6%.
Stocks also pulled back after a disappointing seven-year note auction.
Stocks got a lift earlier after
Federal Reserve
Chairman Ben Bernanke said the economy still needs accommodative policies to maintain growth during his testimony on Fed exit strategies before the House Committee on Financial Services today.
Investors also responded to news that
initial jobless claims shed 14,000 to a seasonally adjusted 442,000 for the week ended March 20.
The
health care bill
will return to the House for final congressional approval. Republicans objected to language in the bill related to Pell grants from low-income students.
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The Economy
The Labor Department said initial jobless claims came in at 442,000, showing a higher-than-expected decline from the prior week's downwardly revised level of 456,000. Economists had been projecting a smaller decline to 450,000 claims.
"Claims still appear to be above levels consistent with stabilization in payrolls -- we think they probably have to fall to 425,000. Unusually bad winter weather throughout much of the year may have raised new claims above their underlying trend," said UBS economist Maury Harris, who noted improvements across other labor market measures which point to an unemployment rate that has peaked.
Looking ahead to the government's nonfarm payroll report on April 2, Harris, who suspects the underlying trend in private payrolls may be slightly positive, forecast payrolls to rise 135,000 in March. "We estimate temporary hiring for the 2010 Census of 45,000. And we allow for some payback for blizzard-related layoffs in February -- around 40,000."
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Injection season began earlier than usual this year as the Energy Information Administration reported an increase of 11 billion cubic feet to natural gas inventories in the week ended March 19. The level was in line with the injection range of 9 billion to 13 billion cubic feet that analysts polled by Platts had been expecting.
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Company News
The financial sector held on to broad gains at the close, as
Bank of America
(BAC) - Get Report
and
American Express
(AXP) - Get Report
finished in positive territory on the Dow.
Walt Disney
(DIS) - Get Report
and
Microsoft
(MSFT) - Get Report
finished as the blue-chip average's leaders.
DuPont
(DD) - Get Report
,
Alcoa
(AA) - Get Report
and
Pfizer
(PFE) - Get Report
were the Dow's biggest laggards.
Qualcomm
(QCOM) - Get Report
shares jumped 4.9% after it raised profit and sales targets for the second quarter. Qualcomm now expects adjusted earnings of 57 cents, which was raised for its initial target of 51 cents. Analysts had been looking for a profit of 53 cents.
Shares of
Citigroup
(C) - Get Report
rose 2.9%, to $4.27 on news that the Treasury is planning to unload its 27% stake in the company through a preset trading plan, according to
Bloomberg
.
Ambac Financial Group
(ABK)
was one of the most heavily traded on the
New York Stock Exchange
. Shares were plunging more than 22% following news that the company may consider a negotiated restructuring of debt through a prepackaged bankruptcy proceeding or seek bankruptcy protection without agreement concerning a plan of reorganization with major creditors.
Citigroup,
Bank of America
(BAC) - Get Report
and
General Electric
(GE) - Get Report
were the NYSE's most actively traded.
Shares of
Lululemon Athletica
(LULU) - Get Report
gained 9.3% after reporting fourth-quarter earnings that nearly tripled and issuing strong 2010 guidance.
Best Buy
(BBY) - Get Report
shares added 3.6% to $42.66 after the retailer exceeded fourth-quarter estimates and issued 2010 earnings guidance that topped analysts' expectations.
ConAgra Foods
(CAG) - Get Report
credited profit improvement across its consumer foods business for better-than-expected third-quarter profits. The stock was down by $1.16, or 4.4%, to $24.94.
Spice company
McCormick
(MKC) - Get Report
posted higher-than-expected earnings for the first quarter and reaffirmed its goal to boost year-end earnings to between $2.49 and $2.54 a share. The guidance is roughly in line with analysts' forecasts for a profit of $2.53 a share. McCormick shares shed $1.34, or 3.4%, to $38.03.
Wells Fargo
(WFC) - Get Report
agreed to
acquire
GMAC's
North American factoring portfolio on Wednesday, underscoring its belief that small- and medium-sized business lending will be a big part of the recovery. The stock traded higher by 20 cents, or 0.7%, to $31.06.
After the bell,
Oracle
(ORCL) - Get Report
said its
but landed in line with expectations after adjustments, while revenue rose 17%.
The Dow was saw volume at 200.3 million, compared with an average of 200 million. Listed volume for the NYSE was nearly 5.7 billion.
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Commodities and the Dollar
Natural gas futures slipped on EIA storage data. The April delivery contract shed 12 cents to settle at $3.98 per million British thermal units.
Elsewhere in commodities markets, crude oil for May delivery fell 8 cents, to settle at $80.53 a barrel and the April
gold contract settled $4.10 higher at $1,092.90 an ounce.
The dollar had been trading lower against a basket of currencies, but the dollar index reversed and moved higher by 0.2% in the afternoon.
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Treasuries
The U.S. Treasury's $32 billion auction of seven-year notes had a high yield of 3.374% and a bid-to-cover ratio of 2.61, which was below the average ratio of 2.72.
Prices on U.S. debt securities fell across maturities, lifting yields. The benchmark 10-year Treasury weakened 9/32, raising the yield to 3.884%.
The seven-year note fell 7/32, lifting the yield to 3.325%. The 30-year bond slipped 19/32, hiking the yield to 4.764%.
--Written by Melinda Peer and Sung Moss in New York
.
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