Updated from 1:17 p.m. EST
Stocks on Wall Street were shaking off their worst lows of the day Thursday afternoon after the president elect delivered an urgent call to action with a his economic recovery plan for the nation.
Dow Jones Industrial Average
was losing 70 points at 8699, and the
was off 2 points at 904. The
was gaining 8 points at 1607.
The morning got off to a bleak start on Wall Street as retail numbers began to roll in much lower than expected. Retail, bank and U.S. automaker stocks posted the biggest declines on the Dow.
"It is time to set a new course for this economy, and that change must begin now," said President-elect Barack Obama, pitching his economic stimulus plan. "Our goal is not to create a slew of new government programs, but a foundation for long term economic growth," he said.
The president elect said the so-called
will provide, among other things, a $1,000 tax cut to 95% of working families, and the creation of jobs, particularly in clean energy and the private sector. Indeed, the scale of the $775 billion plan is unprecedented, but so is the severity of the situation, said Obama, who noted that it's altogether likely that things will get worse before they get better.
"Every day we wait, or point fingers, or drag our feet ... we will sink deeper into a crisis that at some point we may not be able to reverse," said Obama.
Any enthusiasm Obama bolstered was offset by the retail squeeze.
said December same-store sales were worse than Wall Street expected and reined in its fourth quarter guidance, while
said it will close underperforming stores.
said same-store sales fell about 4%.
said December sales fell 12%, and
Abercrombie & Fitch
said sales slumped 18% and same-store sales took a 24% hit.
A bright spot,
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
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
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.
Taking a look at commodities, oil fell 93 cents to settle at $41.70 a barrel, while gold added $12.80 to settle at $854.50 an ounce.
Longer dated Treasuries were mixed early Thursday afternoon; the 10-year note was climbing 9.5/32 to yield 2.5% after an auction of $16 billion of reopened 10-year notes, and the 30-year was down 6/32, yielding 3%.
Indirect bidders, which include foreign central banks, took about 18% of the auction, in line with long-term averages, according to a
report. Typically, foreign demand for reopened auctions is less than for new issues, it noted.
"For those worried that the U.S. will have difficulty raising money to fund its battle against the financial and economic crisis, today's data are welcome, wrote chief bond market strategist for Miller Tabak, Tony Crescenzi, in his
blog. "Nevertheless, with U.S. borrowing needs continuous and growing, plenty of challenges lie ahead."
The dollar was weaker against the euro, pound and yen.
Overseas, the FTSE in London and the DAX in Frankfurt were giving up ground Thursday. In Asia, Japan's Nikkei and Hong Kong's Hang Seng ended with losses.
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