After a brief pop at the open, stocks couldn't keep those gains and ended lower, as Wall Street digested President Bush's tax cut plan and awaited Federal Reserve Chairman Alan Greenspan's economic outlook next week.
Also weighing on the market was computer networking giant Cisco Systems Inc. (CSCO), which posted earnings that missed Wall Street expectations by a penny and pushed the Nasdaq lower Wednesday.
Adding to the gloomy mood was selling in the retail sector. January proved to be a markdown month for most U.S. retailers after a disappointing holiday season. While some chains did benefit from January's selling spree, others warned of major earnings shortfalls as a result of the discounting, and their respective stocks subsequently were lower.
Todger Anderson, manager of Westcore Fds:MIDCO Growth Fund, told Standard & Poor's research unit he doesn't see the market making big moves up or down in the near future. "I think we're going to be consolidating things here for months," Anderson noted.
Investors also digested another batch of earnings releases. Among them, WorldCom Inc. (WCOM), the No. 2 U.S. long-distance telephone company, posted lower fourth-quarter profits, in line with lowered expectations, as weakness in the long-distance telephone business offset strong growth in data, Internet and international services.
The Nasdaq ended down 45.76 points, or 1.75%, at 2,562.06. The Dow finished off 66.50 points, or 0.61%, at 10,880.22. The S&P 500 was down by 8.50 points, or 0.63%, at 1,332.39.
Treasuries finished higher. There was little reaction to a report that December wholesale sales rose 0.7%, and inventories were unchanged. And in a separate economic report, the number of new unemployment applications filed in the latest week rose to its highest level in five weeks, the Labor Department said on Thursday in a report indicating the pace of hiring has slowed.
Meanwhile, the 30-year auction looked a little shaky given the uncertain future status of the issue, according to Standard & Poor's research unit. This could make for a sloppy auction. Some traders contacted look for the bond to capture some demand on the scarcity issue, though others aren't so sanguine.
Stocks in the News
The U.S. Federal Trade Commission has requested more information regarding PepsiCo Inc.'s (PEP) proposed acquisition of Quaker Oats Co. (OAT), which makes cereal and the Gatorade sports drink, the companies said Thursday: Reuters
Gap Inc. (GPS), the largest U.S. apparel retailing chain, on Thursday reported disappointing January sales and forecast that first-quarter earnings would fall short of Wall Street estimates: Reuters
Independent power producer Calpine Corp. (CPN) agreed on Thursday to purchase Canadian energy company Encal Energy Ltd. for $868.8 million in stock, significantly bolstering the company's efforts to produce and transport natural gas between western Canada and the United States: Reuters
European markets were trading mixed. The London Financial Times-Stock Exchange 100 index finished down 19.50 points, or 0.31%, at 6,206.10. In Germany, the DAX Index ended up 57.85 points, or 0.88%, at 6,636.81 as German industrial production rose 0.7% in December. Meanwhile, France's CAC 40 ended up 21.32 points, or 0.37%, at 5,773.46.
In Asia, the markets finished lower. Japan's Nikkei 225 Index closed down 227.78 points, or 1.70%, at 13,138.23. Hong Kong's Hang Seng index, meanwhile, ended down 140.07 points, or 0.87%, at 15,909.40.
President George W. Bush offered a $1.6 trillion tax cut plan to Congress on Thursday, arguing it is needed to spur U.S. economic growth: Reuters
Authorities were weighing charges on Thursday against a 47-year-old accountant from Evansville, Indiana, who police said fired several shots outside the White House, touching off a massive security alert before he was shot by a Secret Service officer and subdued: Reuters
The bursting of the dot-com bubble is reaching unexpectedly into the lives of families, as flamed-out young
entrepreneurs rush back to their parents for shelter and money: the Wall Street Journal