US Stocks Languish Ahead Of Key Jobs Report
February 02 2012 - 3:13PM
Dow Jones News
The Dow industrials fell, on pace to decline for a fifth time in
six sessions, as mixed quarterly earnings curbed sentiment ahead of
Friday's readings on jobs.
The Dow Jones Industrial Average dropped six points, or 0.1%, to
12711, in Thursday afternoon trading, remaining just below a
six-month high. The Standard & Poor's 500-stock index rose two
points, or 0.2%, to 1329, and the technology-oriented Nasdaq
Composite edged up ten points, or 0.4%, to 2858, and is up 9.7%
this year.
Drug makers weighed down the Dow. Pfizer fell 1.2%, while Merck
shed 0.7% after reporting fourth-quarter revenue that fell shy of
expectations. Alcoa led among Dow components, climbing 2.1%, while
Bank of America climbed 1.4%.
A reading that showed initial unemployment claims decreased by
12,000, to 367,000, last week slightly beat expectations. On
Friday, the monthly report on nonfarm payrolls and the unemployment
rate will be released.
Investors also watched for signals from Federal Reserve Chairman
Ben Bernanke, who testified before U.S. lawmakers Thursday. Mr.
Bernanke described the pace of the U.S. economic recovery as
"frustratingly slow," although he said the Fed anticipated higher
levels of growth in the coming year than were seen in 2011. Mr.
Bernanke also warned of the importance of addressing fiscal
challenges in the U.S., pointing to the Europe's sovereign-debt
crisis as an example of out-of-control fiscal policies.
"Bernanke's not a font of optimism. We're seeing some positive
economic signs, but the issue is that in everybody's subconscious
mind is that there are still fundamental weaknesses in the
underlying economy. That's what's holding it back," said Len Blum,
managing partner at Westwood Capital LLC.
European markets inched higher. The Stoxx Europe 600 rose 0.2%,
its third consecutive gain. Spain raised slightly more than its
planned amount of cash in a government bond sale and at lower
borrowing costs than at previous auctions.
Asian bourses were broadly higher. China's Shanghai Composite
surged 2% and Japan's Nikkei Stock Average gained 0.8%.
Gold futures rose 0.6%, to 1756.80 a troy ounce, a new high in
2012, while crude-oil prices lost 1.5%, to $96.11 a barrel. The
dollar edged higher against the euro and the yen. The yield on
10-year U.S. Treasurys fell to 1.825%.
In the U.S., Dow Chemical fell 1.2% after the company reported
fourth-quarter earnings that missed estimates, citing deterioration
in the macro environment. The chemical company also said it didn't
expect material improvements in market conditions this quarter.
MasterCard rose 5.8% after increased card spending helped the
company turn in core earnings ahead of expectations.
Abercrombie & Fitch skidded 11%, the worst performers on the
S&P 500, after the apparel retailer indicated that fiscal
fourth-quarter earnings would fall well short of expectations.
Fellow retailer Ann slid 8.5% after the company said fiscal
fourth-quarter results would be below expectations, citing a
"significantly higher-than-anticipated" promotional environment in
its Ann Taylor stores.
Other retailers fared better. Gap projected fiscal
fourth-quarter earnings ahead of estimates as Banana Republic
outperformed the other segments and January same-store sales
declined less than expected. Shares jumped 10% and led the S&P
500.
Macy's raised its profit forecast for the fiscal fourth quarter
and reported upbeat sales, signaling its recent strength continued
through the holidays even as January same-store sales fell short of
views. Shares advanced 3.4%.
Kohl's raised its fiscal fourth-quarter projections as it
reported better-than-expected January same-store sales, sending
shares up 2.5%.
Facebook's filing for an initial public offering touched off a
rally in Zynga. Shares surged 18% to the highest level since the
social gaming company's IPO last month. In its IPO filing, Facebook
revealed that Zynga accounted for about 12% of the social network's
overall revenue in 2011.
Green Mountain Coffee Roasters shot up 22% after the company
reported fiscal first-quarter earnings and revenue that were well
above forecasts, citing strong demand for its Keurig single-cup
brewing system.
Electronic Arts's fiscal third-quarter loss narrowed as the game
developer's "Battlefield 3" and "FIFA 12" titles sold well, and
results topped the company's October forecast. Shares surged
6.8%.
Qualcomm rallied 2.2% after the semiconductor company's fiscal
first-quarter earnings and revenue exceeded expectations, and its
full-year outlook was above projections.
Kellogg's fourth-quarter earnings rose 23% as the cereal maker
posted stronger-than-expected sales growth driven largely by higher
prices. Shares gained 2.8%.
-By Chris Dieterich, Dow Jones Newswires; 212-416-2611;
christopher.dieterich@dowjones.com