Stocks slip despite jobless claims drop
New unemployment claims decrease unexpectedly. Same-store sales rise at American retailers. Alcoa will report third-quarter results.
By Melinda Peer, TheStreet
Updated at 1:27 p.m. ET
At 1:27 p.m. ET, the Dow Jones Industrial Average ($INDU) was down by 48 points, or 0.4%, at 10,919. The S&P 500 ($INX) was down by 5.3 points, or 0.5%, at 1,155. The Nasdaq ($COMPX) was falling 3.8 points, or 0.2%, to 2,377.
The Labor Department said new requests for unemployment benefits decreased by 11,000 to 445,000 in the week ended Oct. 2, down from a revised 456,000 in the previous week. Economists had expected the number to increase by 2,000, according to Briefing.com.
Market watchers have been scrutinizing employment reports ahead of the government's September nonfarm payrolls report, scheduled for Friday.
"We'll be caught in a boring trade for the rest of the day since everyone is waiting for that jobs report," said David Chalupnik, head of equities at First American Funds. Chalupnik doesn't expect tomorrow's number to stray too far from consensus estimates.
The dollar was trading higher against a basket of currencies, with the dollar index up by 0.2%.
Pfizer (PFE) was leading the Dow, rising 1% to $17.43. AT&T (T) was the benchmark's biggest laggard, falling 1.6% to $28.16 on reports that its exclusive agreement to sell Apple's (AAPL) iPhone will end.
JPMorgan (JPM) said Apple shares could rise to as much as $400 during the next year, boosting its earlier price target, a day after a Wall Street Journal report said Apple will end its exclusive iPhone agreement with AT&T and offer a Verizon (VZ) version that will go on sale early next year. JPMorgan analyst Mark Moskowitz said the Verizon iPhone will lift Apple's earnings 11% annually. Apple's stock was trading 0.3% lower at $288.40 while shares of Verizon were down 1% at $33.02.
In other company news, U.S. same-store sales climbed 2.8% in September, on average, according to Thomson Reuters, which compiles data for 28 retailers. Analysts had expected sales to increase 2.1%.
Shares of Costco Wholesale (COST) were shedding 1.1% to $64.67 despite a higher target and stronger estimates from Morgan Stanley, as Citigroup lowered its target and estimates for the retailer and McAdams Wright downgraded the stock to hold from buy.
Alcoa (AA) will report third-quarter results today after the market closes. It will be the first Dow company to do so. Wall Street is looking for a profit of 6 cents a share, according to Briefing.com. Alcoa shares were slipping 1.2% to $12.22.
PepsiCo (PEP) said it expects earnings to grow as much as 12% this year instead of 13%. The company's third-quarter profit jumped 11% to $1.9 billion, or $1.19 a share. Pepsi shares were falling 3.8% to $65.54.
French automaker Renault sold part of its stake in Volvo, raising 28.2 billion Swedish kroner ($4.23 billion).
The Energy Information Administration said natural gas inventories gained 85 billion cubic feet in the week ended Oct. 1, more than the 74 billion to 78 billion cubic feet that analysts polled by Platts had projected.
Natural gas for November delivery was losing 18 cents to trade at $3.68 per British thermal units. The November crude contract was losing 93 cents to $82.30 a barrel.
The December gold contract, the most actively traded gold future, was falling $12 to $1,347.70 an ounce.
The benchmark 10-year Treasury note strengthened 1/32, diluting the yield to 2.39%.
The Bank of England held its key interest rate at 0.5% for the 20th consecutive month and kept its asset-purchase program on hold. The European Central Bank, which sets monetary policy for countries that use the euro, also left its main interest unchanged at 1%.
The FTSE in London lost 0.4%, and the DAX in Frankfurt rose 0.1%. Hong Kong's Hang Seng inched 0.02% higher, while Japan's Nikkei slipped 0.07%.
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[BRIEFING.COM] The stock market finished a down week on a cautious note with small caps leading the retreat. The Russell 2000 lost 0.5%, widening its weekly decline to 2.6%, while the S&P 500 shed 0.3%. The benchmark index ended the week lower by 2.7%.
This morning, the market was provided a basis to rebound with the July employment report, which was just right for the policy doves (209K versus Briefing.com consensus 220K). It showed payroll growth that was weaker than expected, ... More
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