Stocks fall after jobless claims rise
Weekly initial unemployment claims jump 13,000. Wholesale prices increased slightly in September. Yahoo shares climb on talk of a possible takeover bid. Google reports earnings after the close.
By Melinda Peer, TheStreet
Updated at 1:36 p.m. ET
Stocks were falling after the number of new jobless claims rose more than expected.
At 1:36 p.m. ET, the Dow Jones Industrial Average ($INDU) was down by 36 points, or 0.3%, at 11,060. The S&P 500 ($INX) was down by 7.3 points, or 0.6%, at 1,171. The Nasdaq ($COMPX) was rising by 11 points, or 0.4%, to 2,431.
The Labor Department reported that first-time claims for unemployment benefits jumped 13,000 to 462,000 in the week ended Oct. 9. Last week's figure was revised upward by 4,000 to 449,000. Economists had been expecting a small increase to 450,000, according to Briefing.com.
The Labor Department also released its producer price index, a gauge of inflation. Wholesale prices rose 0.4% in September after rising 0.4% in August. Analysts had expected an increase of 0.2%, according to Briefing.com. The core rate, which excludes volatile food and energy prices, inched up to 0.1%, in line with expectations.
Daniel Penrod, a senior industry analyst at the California Credit Union League, said mixed economic data are creating uncertainty for investors.
"There's concern now that the Fed may be contemplating pushing inflation up to spur movement from consumers to prevent becoming another Japan, where we're sitting at a 0% interest rate with little to no economic growth. That reference appears to be a death knell," Penrod said.
The Commerce Department said the trade deficit widened to $46.3 billion in August, up from $42.8 billion in the previous month. Analysts had predicted a more modest increase to $44.5 billion.
Shares of Yahoo! (YHOO) were rising 7.9% to $16.46 after The Wall Street Journal reported that AOL (AOL) and some private-equity firms are exploring the possibility of a takeover bid. AOL shares were up 3.3% to $25.94.
Shares of Apollo Group (APOL) slumped 25.2% to $3.02 a day after the parent company of the University of Phoenix reported better-than-expected earnings but cautioned that enrollment would drop by more than 40% in the first half of fiscal 2011. The news weighed heavily on stocks throughout the for-profit education sector. Shares of Corinthian Colleges (COCO) lost 18.1% to $4.92 and shares of DeVry (DV) were down by 16.7% at $42.13.
First Solar (FSLR) announced plans to build two four-line manufacturing plants, increasing capacity to nearly 500 megawatts. Each plant, one of which will be in the U.S., will create 600 jobs. The stock was up 3.9% to $142.29.
Occidental Petroleum (OXY) chief executive Rany Irani announced his retirement at the end of 2014 and said he will step down from his position at next May's annual stockholders meeting but would remain a full-time executive chairman. Chief operating officer Stephen Chazen will succeed Irani as CEO. The stock was trading 0.4% higher to $84.62.
Google (GOOG) will report its third-quarter earnings after today's closing bell. Analysts are looking for earnings of $6.69 a share, according to Briefing.com. Google shares were sliding 0.3% to $541.78.
Also scheduled to report earnings late Thursday are global semiconductor company Advanced Micro Devices (AMD) and freight transport company J.B. Hunt Transport Services (JBHT). They are expected to report profits of 6 cents and 45 cents a share, respectively. AMD shares were losing 0.7% to $7.17, and J.B. Hunt shares were climbing 1% to $35.57.
The Energy Information Administration said natural-gas storage levels gained 91 billion cubic feet in the week ended Oct. 8. The addition was at the high end of the projected injection range of 89 billion to 93 billion cubic feet that had been estimated by analysts polled by Platts.
Natural gas for November delivery was trading 6 cents lower at $3.64 per British thermal units.
The EIA reported a surprise decrease in crude oil inventories, which lost 400,000 barrels in the week ended Oct. 8. Analysts polled by Platts had anticipated a build of 1.5 million barrels. Gasoline stockpiles shed 1.8 million barrels, slightly exceeding the 1.6 million-barrel drop that had been expected, and distillates fell by 300,000, which was narrower than the decrease of 1.5 million barrels that analysts had projected.
Crude oil for November was falling 9 cents at $82.92 a barrel.
The December gold contract was gaining $5.20 to $1,375.70 an ounce.
The dollar was trading lower against a basket of currencies, with the dollar index down by 0.6%. The benchmark 10-year Treasury note fell 4/32, lifting the yield to 2.434%.
Hong Kong's Hang Seng jumped 1.7%, and Japan's Nikkei soared 1.9%. The FTSE in London was slipping 0.4%, while the DAX in Frankfurt was gaining 0.3%.
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