Weak Data Hit Stocks

The major averages on Wall Street are declining in the early going after a report on industrial production is weaker than expected. GE and CNET are rising as trading begins.
By Sarina Penn ,

Updated from 8:07 a.m. EDT

Stocks on Wall Street were falling early Thursday as a disappointing economic report robbed the market of its earlier upward momentum.

The

Dow Jones Industrial Average

sank 24 points to 12,874, and the

S&P 500

was off marginally at 1408. The

Nasdaq Composite

edged down 1 point to 2496.

Index futures had been pointing to a higher open, but the sentiment turned downward after the

Federal Reserve

said industrial production fell 0.7% in April, worse than the 0.3% decline that had been expected. March was revised to show an increase of only 0.2%, rather than the 0.3% uptick that had been reported.

Capacity utilization was also a bit light, coming in at 79.7% compared with the 80.1% consensus forecast.

Another drag was the New York Empire State manufacturing index, which registered at negative 3.2, whereas analysts were expecting a reading of 0.

Elsewhere on the economic docket, jobless claims were roughly in line with expectations, rising by 6,000 to 371,000. That was about 1,000 more than had been predicted.

Last time out, the major indices rallied strongly for most of the session thanks to encouraging inflation data, until the final hour, when profit-taking deflated most of those gains. At the end of the day, the Dow rose 66 points to 12,898, and the S&P 500 climbed 6 points to 1409. The Nasdaq edged up 2 points to 2497.

As the new day began, traders were greeted with word that

CBS

(CBS) - Get Report

would buy Internet media company

CNET

(CNET) - Get Report

for $1.8 billion. That news lifted CNET by more than 40%, but CBS was slipping 3%.

General Electric

(GE) - Get Report

, a component of the Dow, was another early gainer, tacking on 0.7% following a report in

The Wall Street Journal

that the company is considering selling or parting ways with its appliances division. The unit could fetch $5 billion to $8 billion, the report said.

Meanwhile, investors were mulling reports that billionaire investor Carl Icahn -- who was said earlier this week to have begun acquiring large amounts of

Yahoo!

(YHOO)

stock -- has lined up 10 possible directors to nominate as replacements for the Internet company's board. Yahoo! shares were up 1.7% in the premarket.

Icahn's interest came after

Microsoft

(MSFT) - Get Report

walked away from its merger offer for Yahoo!.

Elsewhere, Britain-based bank

Barclays

(BCS) - Get Report

lost 3.3% after reporting a $1.94 billion writedown and saying its first-quarter profit had withered from last year.

JC Penney

(JCP) - Get Report

said its first-quarter income plunged by 50% from a year earlier, and the retailer predicted that 2008 will be a difficult year. Still, shares were up 1.1%.

Among commodities, crude oil was up 66 cents to $124.88 a barrel, and gold futures were off 20 cents at $866.30. The U.S. dollar slipped against both the euro and the yen.

Treasury prices were falling. The 10-year note dipped 3/32 in price to yield 3.93%, and the 30-year bond gave up 8/32 in price, yielding 4.63%.

Markets abroad were mixed. In Asia, Tokyo's Nikkei 225 added 0.9% overnight, but the Hang Seng Index in Hong Kong slipped 0.1%. As for European bourses, London's FTSE 100 climbed 0.2%. Germany's Xetra Dax and the Paris Cac, however, lost 0.3% and 0.1%, respectively.

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