Skip to main content
Publish date:

Wall Street Ticks Lower at the Open

Oil prices are surging to a record high above $127 a barrel.

Updated from 8:03 a.m. EDT

Stocks in the U.S. were easing early Friday as oil soared to a new record high and traders contemplated what an unexpected climb in home starts will mean for the housing sector.


Dow Jones Industrial Average

was down 15 points at 12,978, and the

S&P 500

was off 1 point at 1422. The


was losing 7 points to 2527.

One of the key stories of the morning was the data on housing starts, which surprisingly jumped in April. The Commerce Department said the number of homes on which construction began last month climbed to an annualized rate of 1.032 million from an upwardly revised reading of 954,000 in the prior month. Economists were looking for a drop to 940,000.

"The main reason forecasters missed the April figure was a big increase in starts for multifamily homes," wrote Tony Crescenzi, chief bond market strategist with Miller Tabak and a contributor to

, a sister site to

. He pointed out that this figure is normally a volatile one.

Crescenzi added that, excluding January 1991, single-family home starts were at their lowest level since 1982. "This is good news, as it will help to clear the massive overhang of unsold homes by limiting the amount of new homes put into the housing stock," he said.

TheStreet Recommends

Also, the number of building permits issued rose by 46,000 in April to 978,000, compared with consensus estimate for a drop to 912,000 permits.

The other big news was taking place in the oil market, where crude oil was jumping $3.38 to $127.50 a barrel, its highest level ever. Gold was up $7.60 to $887.60. The U.S. dollar was down 0.2% against the euro at $1.5481 and firmed by 0.2% against the yen at 104.90.

On the corporate side,


(KSS) - Get Kohl's Corporation (KSS) Report

slipped 1.6% after the department-store chain knocked down its 2008 profit guidance to between $2.95 and $3.15 a share. The company's first-quarter profit dropped 26.8%, though it did top analysts' pessimistic expectations.


(JWN) - Get Nordstrom, Inc. (JWN) Report

, however, gained ground on its own earnings beat, even as its bottom line shrank by 24%. The specialty retailer also whittled down its full-year outlook. Shares were adding 2.4%.

Away from retail,


(ADSK) - Get Autodesk, Inc. Report

came in ahead of projections as the design-software firm saw its first-quarter income rise 14% from the prior year. The stock tacked on 1.4%.



posted a

lower first-quarter profit

of $61.2 million, or 23 cents a share. That tops the Thomson Reuters estimate by 2 cents a share, but the stock still gave up 3.7%.

Treasury prices were falling. The 10-year note was down 5/32 in price to yield 3.84% and the 30-year bond was off 7/32 in price, yielding 4.56%.

Meanwhile, the United Nations said in its mid-2008 report that "the world economy is teetering on the brink of a severe global economic downturn" spawned by the U.S. credit crisis, the dollar's long fall, spiking oil and food prices, and "persisting global imbalances." The U.N. predicted that global growth will pull back sharply this year, to 1.8% from last year's 3.8%, and predicted a recovery only to 2.1% in 2009.

Overseas markets were mainly rising. The Nikkei 225 in Tokyo lost 0.2% overnight, but the Hang Seng Index in Hong Kong rose 0.4%. As for Europe, the FTSE 100 climbed 1.3% and Germany's Xetra Dax leaped 1.6%. The Paris Cac was higher by 0.9%.

Last time out, the broad indices worked past early losses to close higher as tech stocks rallied and investors cheered encouraging Northeastern factory data. At the end of the day, the

Dow Jones Industrial Average

rose 94 points at 12,993, and the S&P 500 jumped 15 points to 1424. The tech-heavy

Nasdaq Composite

climbed 37 points to 2534.