By Kristina Peterson
U.S. stocks traded in a narrow range Thursday, boosted by an
unexpected increase in U.S. pending home sales and
better-than-expected back-to-school sales from retailers, but hurt
by employment worries.
The Dow Jones Industrial Average (DJI) rose 8 points, or 0.08%,
to 10277, in recent trading.
Home Depot (HD) was the measure's best performer, up 1.8%,
boosted by the housing data. Alcoa (AA) and Boeing (BA) were also
strong, with gains of more than 1% each.
The Nasdaq Composite (RIXF) rose 0.4% to 2186 and the Standard
& Poor's 500 index (SPX) added 0.4% to 1085, led by its
consumer-discretionary sector.
The gains came as the National Association of Realtors' index
for pending sales of used homes increased 5.2% to 79.4. The report
represents a surprising reversal after the index fell two months in
a row following the April 30 expiration of a tax credit for buyers.
Economists had expected a 1% drop.
In addition, retailers delivered a late-summer surprise, with
sales for the key back-to-school buying month of August largely
coming in better than expected. Kohl's (KSS), J.C. Penney (JCP) and
Macy's (M) all beat expectations and the latter two said
back-to-school sales were going well. Kohl's climbed 1.6%, while
J.C. Penney jumped 3.8% and Macy's edged up 1.1%.
However, Lawrence Yun, NAR's chief economist, warned that the
housing market's recovery would still be a long one.
Meanwhile, other readings on the U.S. economy were less
encouraging. U.S. factory orders rose less than expected in July,
while the level of U.S. workers filing new claims last week
suggested lingering troubles in the job market. Meanwhile, U.S.
productivity in the second quarter fell more than previously
thought, a big drop that reflects the cooling of the economy.
The data come a day ahead of the government's monthly employment
report. Unemployment currently stands at 9.5%, and that figure
Friday is expected to creep up to 9.6% as U.S. employers drop
another 110,000 people off the payrolls.
The euro (CUR_EURUSD) edged up to $1.2804, from $1.2803 late
Wednesday, after the European Central Bank kept its benchmark
interest rate unchanged at a record low 1%, as expected. ECB
President Jean-Claude Trichet said the ECB would extend its tool
box of additional bank funding on a "full allotment" basis, citing
continued uncertainties in the economy.
The U.S. Dollar Index (DXY), reflecting the U.S. currency
against a basket of six others, was flat.
Treasurys were mixed, with an increase in the 2-year note
pushing its yield down to 0.50% while a decline in the 10-year note
lifted its yield to 2.63%.
Crude-oil futures slipped while gold futures edged higher.
Among stocks in focus, Burger King Holdings (BKC) soared 24% on
reports that 3G Capital is expected to buy the fast-food retailer
for $24 a share. An announcement could come later in the day.
Meanwhile, the bidding war between Hewlett-Packard and Dell over
3Par appeared to come to a finish, with H-P (HPQ) raising its
latest offer to $33 a share from $30 and Dell saying it won't offer
another bid. 3Par (PAR) said it determined H-P's revised proposal
is "superior" to the latest one from Dell, and that the company
notified Dell of its intention to terminate its merger agreement
with Dell. H-P edged up 0.5% and 3Par climbed 2.2% while Dell added
1.4%.