Stocks Finish Lower

Major indexes were weighed down by weakness in energy and commodities issues as oil prices plunged

Stocks saw sharp losses toward the end of the trading day Thursday. Blue chip indexes fell to session lows, led a broad sell-off in energy and commodities stocks. Crude oil futures plunged $1.91 to an 11-week low of $48.54 per barrel. Disappointing earnings from Wal-Mart (WMT ) overshadowed a better-than-expected retail sales report.

On Thursday, the Dow Jones industrial average fell 110.77 points, or 1.08%, to 10,189.48. The broader Standard & Poor's 500 index dropped 11.75 points, or 1.00%, to 1,159.36. The Nasdaq composite index lost 7.67 points, or 0.39%, to 1,963.88.

Computer giant Dell (DELL ) announced its quarterly earnings after the close of trading on Thursday. The company posted earnings per share of 37 cents, vs. 28 cents one year earlier, on a 16% rise in revenue. Dell sees second-quarter earnings per share of 37 to 39 cents on a revenue rise of 16% to 18%. The shares moved higher in after-hours trading after posting a slight increase in Thursday's regular session.

In economic news Thursday, retail sales jumped 1.4% in April, vs. consensus estimates of 0.7%. This was a sharp rise from the 0.3% figure in March. The ex-auto figure was up 1.1%.

U.S. initial jobless claims for the week went up 4,000 to 340,000, beating median estimates.

In corporate news Thursday, rating agency Moody's Investors Service cut Ford Motor's (F ) debt ratings but left them at investment-grade status, just days after Standard & Poor's had slashed the automaker's ratings to junk territory.

In merger news, liquid filtration company Cuno (CUNO ) agreed to be acquired by 3M (MMM ) for $1.35 billion in 3M stock and debt assumption.

In earnings news, Wal-Mart saw earnings of 58 cents a share in the first quarter, vs. 50 cents last year. The retailing giant saw a 2.9% rise in same-store sales, with a 9.5% rise in total net revenues. The company blamed higher gasoline prices and an unseasonably cold spring for missing its guidance, and projected better results for the second half of 2005.

Another major retail chain, Target (TGT ), reported earnings of 55 cents per share in the first quarter, beating average analyst estimates by a penny. Year-on-year revenue rose by 12.7 percent, while profit rose by 26%.

American Eagle Outfitters (AEOS ) saw a 27% rise in same-store sales, and posted earnings of 35 cents a share, vs. 18 cents last year. This beat analyst estimates by a penny. The company said it expected earnings for the next quarter between 32 and 33 cents.

Treasury Market

Treasury prices closed higher Thursday afternoon after a successful 10-year note auction signalled firm demand. Treasuries also benefited from a safe-haven bid given concerns over the hedge fund industry and credit derivatives market. The yield on the 10-year note finished lower at 4.17%.

World Markets European stocks finished higher Thursday, after falling oil prices gave strength to the equities markets. In London, the FTSE 100 was up 21.80 points, or 0.45%, to 4,897.20. Leaders benefiting from the lower oil prices included Imperial Chemical Industries and British Airways. Royal & Sun Alliance was higher after reporting strong earnings.

Germany's DAX index rose 23.76 points, or 0.56%, to 4,267.92. First quarter German GDP was up by 1.0%, the biggest gain in four years, and the market saw strong earnings reports from Beiersdorf and Draegerwerk.

In Paris, the CAC 40 index dropped 20.72 points, or 0.52%, to 3,979.53.

Asian markets finished mixed Thursday. Japan's Nikkei 225 index fell 42.76 points, or 0.38%, to 11,077.94. In Japan, Fuji Heavy Industries plunged after Subaru saw a 16.5% drop in its operating profit. Suzuki Motor extended its losses after its weak earnings report yesterday.

In Hong Kong, the Hang Seng index rose 28.48 points, or 0.20%, to close at 13.968.28. Leading gainers included Lenovo, MTR Corp., and Wheelock.

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