By Kristina Peterson
U.S. stocks eked out slight gains Thursday as
better-than-expected readings on housing and retail provided some
encouragement, but investors awaited Friday's jobs data before
making major moves.
The Dow Jones Industrial Average (DJI) edged up 7 points, or
0.1%, to 10277, in recent trading. Home Depot (HD) led the
measure's gains with a 2.3% jump as the home-improvement retailer
was boosted by the housing and retail sales reports.
The Nasdaq Composite (RIXF) rose 0.6% to 2190 and the Standard
& Poor's 500 index (SPX) added 0.5% to 1085. The
consumer-discretionary sector had the biggest gain, lifted by
retailers as sales for the key back-to-school buying month of
August largely came in better than expected. Nordstrom (JWN) jumped
7.3%, Limited Brands (LTD) climbed 5.4% and J.C. Penney (JCP) added
3.1%.
The National Association of Realtors' index for pending sales of
used homes increased 5.2%, 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.
However, Lawrence Yun, NAR's chief economist, warned that the
housing market's recovery would still be a long one.
"We're sort of stuck in the mud," said Barry Knapp, managing
director of equity research at Barclays Capital. While he noted
that the housing and retail sales data topped expectations, Knapp
said "nothing in the data to me points to a change in trend. It
points to continued slow growth."
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.
Noting that Thursday's trading comes a day after the biggest
one-day gain in stocks in nearly two months, Rick Bensignor, chief
market strategist Execution Noble, an international investment
banking group, said investors were hesitant to push stocks up much
more ahead of Friday's jobs data.
"They may very well be waiting for tomorrow's number before they
deploy further capital," he said.
The euro edged up to $1.2830 (CUR_EURUSD), 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, slipped 0.1%. Treasurys were mixed,
with an increase in the 2-year note pushing its yield down to 0.49%
while a decline in the 10-year note lifted its yield up to 2.62%.
Crude-oil futures edged up, as did gold futures.
Among stocks in focus, Burger King Holdings (BKC) soared 24% as
the fast-food retailer confirmed that 3G Capital has signed a deal
to buy the company for $24 a share. The total deal, including both
equity and debt, is around $4 billion and is expected to close
before the end of the year. Burger King said it may solicit better
offers through mid-October.
Meanwhile, computer maker Dell (DELL) withdrew from the bidding
war for 3Par (PAR), surrendering the storage maker to rival
Hewlett-Packard (HPQ) after the tech giant lifted its offer to $2.1
billion. 3Par, which makes storage products used in cloud
computing, accepted H-P's offer, valuing the company at $33 a
share. H-P edged up 0.6%, while Dell rose 1.3% and 3Par climbed
2.3%.