Updated from 4:11 p.m. EDTStocks closed higher Thursday as a big courtroom victory for the tobacco companies and declining oil prices helped bring in buyers after the previous session's selloff. After surging by more than 100 points earlier, the Dow Jones Industrial Average pared its gains but still finished up 73.48 points, or 0.66%, to 11,225.30. The S&P 500 tacked on 3.16 points, or 0.25%, at 1274.07, and the Nasdaq Composite added 1.75 points, or 0.08%, to 2155.09. "We don't know if we've had a correction yet or the first part of a bear market," said Dave Briggs, head of equity trading with Federated. "This is the time of year where rallies do not hold up. We would like to see a bit more fear at market bottoms. It's hard to trust summer rallies, so our timing may not be right for now." Altria ( MO) was propping up the Dow after the Florida Supreme Court reversed a $145 billion punitive damages award against the tobacco industry. The award had stemmed from an earlier and closely watched class-action lawsuit known as the Engle case. Shares of Altria, the parent of Philip Morris, climbed $4.43, or 6%, to close at $77.76 following the ruling. Reynolds American ( RAI), Loews ( LTR) and Vector Group ( VGR), all of which own tobacco units, also strengthened. The Nasdaq was pressured by eBay ( EBAY), which fell 5.3% after Citigroup reduced its stock price target to $40 from $51, citing competition to its PayPal online payment service. Last week, rival Google ( GOOG) introduced its own online checkout service. Meanwhile, eBay said Jeff Jordan, who has headed PayPal since 2004, will leave the company to spend more time with his family. Shares of eBay lost $1.51 to finish at $26.85. About 1.41 billion shares changed hands on the New York Stock Exchange, with advancers beating decliners by a 5-to-3 margin. About 1.63 billion shares moved on the Nasdaq, where winners and losers were even. Jay Suskind, head of institutional equity trading with Ryan Beck & Co, said that there were a lot of factors Thursday "creating a tug of war ahead of the payroll report Friday. The same-store sales numbers were lackluster, but we also may see a technical rebound after yesterday's decline. We also are seeing more players enter back in today after Tuesday's holiday." On Wednesday, concerns about North Korea's missile launch and a spike in oil prices sent stocks to sizable losses. For the session, the Dow fell 0.7% to 11,152, the S&P 500 lost 0.7% to 1271, and the Nasdaq plunged 1.7% to 2153. Away from equities, the 10-year Treasury bond was up 9/32 in price to yield 5.19%, and the dollar fell against the euro and yen. Commodity prices were mixed. August crude fell 5 cents to close at $75.14 a barrel after the Energy Department's inventory report showed an unexpected 700,000-barrel rise in gasoline stockpiles. Elsewhere, gold rose $6.60 to $636.30 an ounce, and copper was up 22 cents at $3.61 a pound. By sector, the Philadelphia Gold & Silver index rose 1.2%, and the Philadelphia Oil Service Sector index dropped 1.8%. Other winners included the Nasdaq Biotech index, up 0.5%, and the Philadelphia/KBW Bank Sector index, up 0.3%. To view Gregg Greenberg's video take on today's market,
Thursday's main economic report came from the Institute for Supply Management, which said its services index fell to 57.0. Economists expected the ISM services index to dip to a reading of 59.0 from 60.1 in May. Ian Shepherdson, chief economist with High Frequency Economics, said that the ISM number shows some "softening but not much forward-looking value. The headline index tends to lag the rate of growth of core retail sales, which have slowed recently, so we are not surprised to see it decline markedly this month." Earlier, the Labor Department said initial jobless claims fell by 2,000 to 313,000 for the week ended July 1. Results were in line with expectations. U.S. chain stores report their monthly same-store sales Thursday. The world's largest retailer, Wal-Mart ( WMT), said same-store sales rose 1.2% for June. Wal-Mart reaffirmed its second-quarter earnings forecast and said it expects July comp sales to rise 1% to 3%. Shares lost 30 cents, or 0.7%, to $46.72. Target ( TGT) rose 1.9% after saying it expects July same-store sales to rise in a range of 4% to 6%. For June, the company reported a 4.8% increase in comp sales. Target finished up 90 cents to $49.17. Among other notable returns was Costco ( COST), which said June comps rose 6% from a year ago, missing the 7% Street consensus. Federated ( FD) said same-store sales rose 1.7%, also missing estimates. Also missing analysts' forecasts for June comps were Pier 1 ( PIR), New York & Co. ( NWY), Limited ( LTD) and Chico's ( CHS). P.F. Chang's Bistro ( PFCB) said second-quarter same-store sales fell 1% at its flagship Bistro chain. Overall, revenue rose 14% to $226 million in the quarter, missing previous guidance for $229.4 million. P.F. Chang's was lower by $1.50, or 4%, to $35.85. American Eagle Outfitters ( AEOS) was one of the few retail winners, reporting an 11% rise in June comp sales. The teen apparel company also raised its second-quarter earnings estimate. J.C. Penney ( JCP) said same-store sales were up 4.3% for the month, beating expectations. The company also raised its second-quarter earnings forecast.
Outside of retail, Openwave ( OPWV) said fourth-quarter revenue will be $90 million to $92 million, missing forecasts for about $120 million. The company expects to break even before items in the period. Openwave plummeted 32.3%, losing $3.70 to $7.77. Sirius Satellite Radio ( SIRI) was trading higher after the company said it added 600,460 subscribers during the second quarter, a 64% jump from a year earlier. Sirius said it now has a total subscriber count of about 4.68 million, more than double last year. Sirius gained 5 cents, or 1.1%, to close at $4.53. Overseas markets were mostly higher, with London's FTSE 100 adding 1.1% to 5890 and Germany's Xetra DAX up 1.2% to 5695. In Asia, Japan's Nikkei fell 1.3% overnight to 15,321, and Hong Kong's Hang Seng gained 1.1% to 16,441.