Market players Thursday weighed better than expected readings on weekly jobless claims and May wholesale sales
U.S. stocks closed slightly higher Thursday in thin trading. Rebounds in technology, financial, commodity and other recently battered groups offset weakness in the health care sector. rading was choppy, with the market wavering on both sides of unchanged during the session.
Alcoa (AA), which kicked off the second-quarter corporate earnings season late Wednesday, fell 2.4% despite posting better-than-expected results. Weekly jobless claims and May wholesale inventory figures had little impact on trading.
On Thursday, the 30-stock Dow Jones industrial average finished higher by 4.76 points, or 0.06%, at 8,183.17. The broad Standard & Poor's 500-stock index was up 3.12 points, or 0.36%, at 882.68. The tech-heavy Nasdaq composite index added 5.38 points, or 0.31%, to 1,752.55.
The dollar index fell, helping gold prices to rise. Energy futures were mixed. Treasuries fell.
The market was awaiting data Friday on the May U.S. trade deficit, June import prices, and the University of Michigan consumer sentiment survey for July. The reports were not likely to show much improvement, according to S&P.
On Thursday, Target Corp. (TGT) said it expects second-quarter earnings per share (EPS) to meet or exceed the current median FirstCall estimate of $0.64. Target reported 6.2% lower June same-store sales and 2.6% lower total sales.
3Com Corp. (COMS) shares slumped after the company posted fourth-quarter non-GAAP EPS of $0.07, vs. $0.07 one year earlier (including option expense) despite an 8.2% sales drop.
Shares of American International Group (AIG) were sharply lower Thursday following a Financial Times report that AIG was in talks with MetLife (MET) to sell its Alico unit.
Shares of YRC Worldwide (YRC) jumped Thursday after the trucking concern said it had reached a tentative agreement with the International Brotherhood of Teamsters (IBT) leadership to modify the terms of the current labor agreement for its employees covered by the National Master Freight Agreement. The proposed changes are designed to reduce the company's cost structure and preserve operating capital.
Citigroup (C) announced its biggest management shake-up since the financial crisis began, replacing its chief financial officer and installing a new banking chief as it prepares to give the government a 34 percent equity stake. Reuters reports the changes come as Chief Executive Vikram Pandit faces heavy pressure to improve performance and shed unwanted assets after Citigroup got a series of government bailouts and posted $36 billion of losses in the six quarters ended March 31. Edward "Ned" Kelly, who became chief financial officer in March, will become a vice chairman focused on strategy and merger activity. The new CFO will be John Gerspach, who has been controller and chief accounting officer. He will be Citigroup's fifth CFO in five years.
The U.S. plan to help buy as much as $40 billion in assets from banks got started almost four months after it was proposed and without Pacific Investment Management, the world's biggest bond manager and an early supporter. The Treasury Department picked nine money managers yesterday for the Public-Private Investment Program, or PPIP, including BlackRock and Invesco. Pimco, which in March announced plans to apply, said it withdrew its application in June because of "uncertainties" about the plan's design. The government's plan is a scaled-down version of a program that was once envisioned to buy as much as $1 trillion in devalued real-estate loans and mortgage-backed assets.
In economic news Thursday, U.S. wholesale sales were up 0.2% in May, while inventories were down 0.8%. April's 0.4% dip in sales was revised up to unchanged, the 1.4% drop in inventories was also revised up slightly to -1.3%. Petroleum sales were up 4.6%, while sales excluding petroleum were down 0.3%. The inventory-sales ratio declined to 1.29 from 1.31.
"The data are a little better than expected, but there shouldn't be much reaction in the markets," says Action Economics.
U.S. jobless claims plunged 52,000 to 565,000 in the week ended July 4, from a revised 617,000 the week before (from 614,000). It's the first time the weekly figure was below 600,000 since Jan. 24. Continuing claims rose 159,000 to a fresh record high of 6,883,000 from a revised 6,724,000 (from 6,702,000).
S&P chief economist David Wyss believes the report "is distorted by the holiday weekend, and probably reflects seasonal adjustment anomalies rather than any sudden improvement in the labor market."