Updated from 9:42 a.m. EST
Fog rolled through Wall Street Thursday morning, as disparate economic readings and signs of continuing malaise in corporate America had investors checking their compasses.
A trio of economic readings from the government depicted a murky employment picture, falling prices and possibly an end to the country's car-buying binge. Profit warnings from
and a spate of layoff announcements contributed to a negative tone and stocks were broadly lower at midmorning.
Economists said the data continued to underscore the weakness of the U.S. economy. "Put all the numbers together and they tell us a picture that is consistent with premise that economy's bottoming out," said Anthony Karydakis, senior financial economist at Banc One Capital Markets. "But it doesn't tell you a story of recovery yet."
According to the Labor Department, the number of U.S. workers seeking unemployment benefits for the first time fell by the largest amount since August 1992 last week. Initial jobless claims fell by 86,000 to 394,000 in the week ended Dec. 8. Economists were expecting claims to fall by about 15,000. The four-week moving average of claims fell by 12,000 to 450,000. The total number of workers receiving unemployment benefits increased, however, rising by 36,000 to around 3.66 million.
"The market could take some heart in the slowing of initial claims," said Peter Hooper, chief U.S. economist at Deutsche Bank. "I think what's going on there is that on the production side of economy, things are beginning to improve a bit."
But Karydakis cautioned against reading too much into the weekly numbers. "We should give the decline some credence, but we still shouldn't draw some major conclusions from it as this is a series that has been notorious over the years for the extreme degree of noise that it may contain on a week to week basis," he said. The holidays also complicate the data, he added.
"It'll be a while until we're able to get a clean read on where the pace of layoffs stands," Karydakis said.
Retail sales fell 3.7% last month, the biggest monthly decline in nine years, from a revised 6.4% increase in October. The November figure was dragged down by an 11.9% fall in auto sales. Excluding those, retail sales fell by 0.5%. Auto sales rose by a revised 24.2% in October, thanks to interest-free financing.
, analysts expected retail sales to fall 2.8%. A
Dow Jones Newswires-CNBC
poll of economists projected a 3% decline in retail sales. Both surveys indicated retail sales excluding autos would come in flat for the month.
"This tells us that the consumer sector is certainly not yet in rebound," said Hooper. "We do have some payback in the surge of auto sales that we've had, but I'm anticipating some pickup from there," Hooper said.
Karydakis said he believes there'll be another decline in December's retail sales because of subdued auto and department store sales.
PPI data indicated that wholesale prices fell for a second straight month in November, signaling that the risk of inflation remains low. The PPI fell 0.6% last month as falling energy prices offset upticks in automobiles and tobacco prices. The core index, which excludes food and energy, rose 0.2%. Experts were looking for the overall index to slip 0.3% and calling for the core index to rise 0.1%.
"It's still a question of how long we're going to stay in that bottoming-out phase before we start seeing a turnaround," said Karydakis