Crude moved above $135 per barrel overnight, but backed off Thursday. Jobless claims dropped last week, easing recession fears
Stocks rose Thursday as oil prices took a break from their record-breaking run higher.
Also, data on jobless claims eased recession fears, and Ford Motor (F) warned of rough times ahead.
On the NYMEX Thursday, crude oil for July delivery was down $2.36 at $130.81 per barrel, after rising more than $4 on Wednesday and pushing above $135 overnight.
Technical strategist Mark Arbeter of Standard & Poor's said oil is approaching at least a short-term peak. "However, if crude continues to power ahead for too much longer, we believe its effect on stock prices will not be positive," he said.
Stocks suffered from oil's surge on Wednesday but rebounded a bit Thursday. The Dow Jones industrial average rose 24.43 points, or 0.19%, to 12,625.62, after tumbling 227.49 points on Wednesday. The broader S&P 500 index gained 3.64 points, or 0.26%, to 1,394.35. The tech-heavy Nasdaq composite index added 16.31 points, or 0.67%, to 2,464.58.
On the New York Stock Exchange, 17 stocks were higher for every 14 lower. On the Nasdaq, the ratio was 17 to 8 positive.
U.S. jobless claims fell 9,000 last week to 365,000. "The data continue to contradict notions of a recession, as well as the [Federal Reserve's] fear that the unemployment rate will soar higher this year," Action Economics says. But Andrew Gledhill of Moody's Economy.com said: "With the current downturn and the uncertain economic outlook, businesses will remain cautious" in hiring.
Ford no longer expects to be profitable in 2009, which was the troubled automakers' previous goal. The firm said it will cut production further this quarter, by 20,000 vehicles, and plans to cut output by 15% to 20% in the third quarter.
Home prices continue to fall. The Office of Federal Housing Enterprise Oversight house index fell 1.7% from the fourth quarter of 2007 to the first quarter of this year, the largest quarterly decline in the index's 17-year history.
Among stocks in the news Thursday, UBS (UBS) will raise $15.5 billion in new capital, but only by selling new shares at a 31% discount.
Sallie Mae Corp. (SLM) plans to continue making federally guaranteed student loans, the Wall Street Journal says. There were concerns the credit crisis would drive Sallie Mae from the market.
Limited Brands (LTD) posted better-than-expected earnings of 11 cents per share, vs. 13 cents a year ago, as same-store sales fell 8% and revenue dropped 16%. The firm expects second quarter earnings of 16 to 20 cents per share.
Computer Sciences (CSC) reported earnings of $1.15 per share, vs. $1.44 a year ago, even as revenue rose 11%.
AnnTaylor Stores (ANN) posted earnings of 43 cents per share, vs. 46 cents a year ago, as same-store sales dropped 4.3%.
Suntech Power Holdings (STP) reported earnings of 33 cents per share, vs. 16 cents a year ago, as revenue rose 76%.
Pfizer (PFE) is facing concerns about is smoking-cessation medicine Chantix. A nonprofit drug safety group is warning of serious side effects, the Wall Street Journal says.
Major European indexes were mixed Thursday. In London, the FTSE 100 index fell 0.27% to 6,181.60. Paris' CAC 40 index edged up just 0.02% to 5,028.74, and Germany's DAX index moved 0.42% higher to 7,070.33.
In Asia, Japan's Nikkei 225 gained 0.37% to 13,978.46, while Hong Kong's Hang Seng index lost 1.64% to 25,043.12.
Bond prices fell Thursday. The two-year note dropped 08/32 to 99-07/32 for a yield of 2.53%; ten-year notes fell 27/32 to 99-22/32 for a yield of 3.91%; and the 30-year Treasury fell 1-09/32 to 96-00/32 for a yield of 4.62%.