Telecoms, retailers weigh on market

Updated: 7:10 p.m. ET

Stocks were mostly lower today as a rising dollar pushed commodity prices and energy and gold stocks down and a number of retailers reported disappointing December sales.

Telecom stocks were also weak. Technology shares were mostly higher.

The dollar's gains pushed oil below $89 a barrel, and gold moved down slightly.

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The Dow Jones industrials ($INDU) closed down 26 points to 11,697. The blue chips had been down as much as 55 points. The Standard & Poor's 500 Index ($INX) was off 3 points to 1,274. But the Nasdaq Composite Index ($COMPX) was up 8 points to 2,710.

Also keeping markets in check was the fact that many investors didn't want to make big bets ahead of Friday's jobs and unemployment report from the Labor Department. The report is due before the market open. Futures trading suggests a modestly lower open.

Going into Friday, the Dow is up 1% for the first week of the year, with the S&P 500 up 1.3% and the Nasdaq up 2.2%. If the gains hold, the Dow and S&P 500 will be up for six straight weeks, with the Nasdaq up six of seven weeks.

Crude oil settled at $88.38 a barrel, down $1.92 from Wednesday. Gold settled down $2 to $1,371.70 an ounce. Crude is down 3.3% this week, with gold off 3.4%.

But AAA's Fuel Gauge Report showed gasoline averaging $3.079 a barrel today, up slightly from Wednesday and 0.2% higher this week.

Interest rates were lower, with the 10-year Treasury yield falling to 3.419% from 3.483% on Wednesday.

The dollar was higher against major currencies. The value of the euro briefly dropped under $1.30.

Energy prices -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Crude oil			$88.38			$90.30			-3.28%			-3.28%
(per barrel)
Heating oil			$2.5112			$2.5422			-1.28%			-1.28%
(per gallon)
Natural gas			$4.4340			$4.4730			0.66%			0.66%
(per mil. BTU)
Unleaded gasoline			$2.4430			$2.4451			-0.42%			-0.42%
(per gallon)
Retail gasoline			$3.0790			$3.0770			0.23%			0.23%
(per gallon; AAA)

Holidays may not have been that joyful
The surprise of the day was that retailers' December sales were not uniformly robust. Earlier estimates had suggested that holiday sales were the best since 2007. But the results either missed estimates or simply fell.

There also appeared to be a division between retailers catering to affluent consumers and those who targeted lower-income consumers. Nordstrom (JWN) reported an 8.4% same-store sales increase. Target (TGT) sales were up just 0.9%; analysts had expected a 3.9% gain.

Target's gains in apparel and groceries were offset by electronics, toys and some home categories, the company said. 

Nordstrom shares were up 0.2% to $42.94, while Target was off 6.8% to $54.93, third-worst among S&P 500 stocks.

Gap (GPS), down 6.9% to $20.70, was the second-worst S&P 500 performer, after the company reported an 8% decline in same-store sales. Analysts had expected a 2.4% gain.

The Standard & Poor's Retail Index ($RLX) was off 8 points, or 1.6%, to 501. 

Macy's (M) shares were off 4% to $23.97. Same-store sales were up 3.9%, compared with the Street estimate of 4.5%.

But TJX Companies (TJX) shares jumped 5.9% to $45.52, and Ross Stores (ROST) rose 1.8% to $63.77. TJX reported a 2% increase in sales, compared with expectations for a 2.8% decline. Ross sales climbed 4% from a year ago, compared with the 0.7% decline that analysts had expected.

Estimates rise on job gains
A number of economists were rapidly boosting their estimates of nonfarm payroll gains after the ADP National Employment Report suggested 297,000 new jobs were created in December.

Bloomberg News said the average estimate is now for a gain of 150,000 jobs in the Labor Department's report.

That's up from 135,000 before the ADP report came out Wednesday. The report was another bit of evidence of a broadening recovery. The Institute of Supply Management's nonfactory index on Wednesday showed service industries expanded in December at the fastest pace since 2006.

Ahead of the jobs report, the Labor Department said jobless claims increased in the latest week to a seasonally adjusted 409,000. But the four-week average of 410,750 was the lowest since late July 2008. Economists like to use a four-week average to smooth out week-to-week volatility.

UBS Financial Services raised its estimate from 125,000 to 160,000. Goldman Sachs and JPMorgan Chase held their estimates. Goldman said seasonal factors may have distorted the ADP estimate.

The Liscio Report thinks the gains will be closer to 130,000, with the unemployment rate at 9.7%. Polling firm Gallup does its own unemployment measure, without any seasonal adjustments. It sees unemployment at 9.8% at the end of December up from 8.8% at the end of November.

Debt warning startles market
The market briefly looked like it might slump badly after the government warned that the federal debt limit could be reached as early as March 31. The Dow quickly dropped to as low as 11,667 before clawing higher.

Treasury Secretary Timothy Geithner warned that failure by Congress to raise the debt limit, which would effectively put the United States into default on its obligations for the first time in its history, would have consequences "potentially much more harmful than the effects of the financial crisis of 2008 and 2009."

The warning, in a letter to Senate Majority Leader Harry Reid, D-Nev., may well be the start of intense wrangling over how to deal with government finances, although there were signals from new House Speaker John Boehner that Republicans would work constructively on the issue.

Weakness in telecoms weighs on market
Only nine of the 30 Dow stocks were higher today.

The weak links were AT&T (T), off 1.4% to $29.15, and Verizon Communications (VZ), down 2.6% to $36.23.

Their weakness was due in part to a slump in shares of MetroPCS (PCS). Shares dropped 6.7% to $13.30, the fourth-worst performer among S&P 500 stocks, after fourth-quarter subscriber growth of 298,000 was less than expected. Piper Jaffray had been looking for 450,000 additions.

Boeing (BA) was up 2% to $68.80. The aerospace giant reported deliveries of 462 airliners in 2010, better than the expected 460. The company also sold more than three times as many planes in 2010 as the year before as air-travel demand recovered from the global economic crisis.

The Dow leader was Microsoft (MSFT), up 2.9% to $28.82 on investor excitement over the company's announcement that the Windows personal-computer operating system will run on low-power, mobile-device chips called ARM processors made by Nvidia  (NVDA), Qualcomm (QCOM) and Texas Instruments (TXN). (Microsoft publishes MSN Money.)

ARM processors are designed by the British company ARM Holdings (ARMH). ARM was down 0.5% to $21.78.

Nvidia led the S&P 500 and Nasdaq-100 ($NDX.X), finishing up 13.8% to $19.33.

Fifty-four Nasdaq-100 stocks were higher; the index was up 4 points to 2,278. Apple (AAPL) was flat at $334.02 after hitting a new high of $335.25.

Energy shares move lower
Chevron (CVX) was down 0.9% to $90.65 as crude oil moved lower. Schlumberger (SLB) was off 2.5% to $80.53.

BP (BP) was off 0.6% to $46.23 in New York as investors bet that a new presidential panel report that spreads the blame for the country's worst-ever oil spill means the companies will avoid a very costly gross-negligence charge.

Halliburton (HAL) was off 3% to $38.22; but Transocean (RIG), which owned the Deepwater Horizon rig that exploded in April, was down 0.3%to $73.04.

Freeport-McMoRan Copper & Gold (FCX) was off 1.9% to $116.09 on the gold decline and a fall today in the price of copper.

Short hits from the markets -- New York close
			Thur.			Wed.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.140%			0.140%			16.67%			16.67%
5-year Treasury note			2.083%			2.158%			3.32%			3.32%
10-year Treasury note			3.419%			3.483%			3.45%			3.45%
30-year Treasury bond			4.534%			4.551%			3.94%			3.94%
Currencies
U.S. Dollar Index			81.093			80.538			2.28%			2.28%
British pound			$1.5477			$1.5511			-0.82%			-0.82%
(in U.S. $)
U.S. $ in pounds			£0.646			£0.645			0.83%			0.83%
Euro in dollars			$1.302			$1.315			-2.69%			-2.69%
(in U.S. $)
U.S. $ in euros			€ 0.768			€ 0.760			2.77%			2.77%
U.S. $ in yen			83.542			83.200			2.67%			2.67%
U.S. $ in Chinese			6.649			6.615			0.52%			0.52%
yuan
Canada dollar			$1.005			$1.004			0.11%			0.11%
(in U.S. $)
U.S. dollar			$0.996			$0.996			-0.11%			-0.11%
(in Canadian $)
Commodities
Gold			$1,371.70			$1,373.70			-3.38%			-3.38%
(per troy ounce)
Copper			$4.33			$4.41			-2.64%			-2.64%
(per pound)
Silver			$29.126			$29.20			-5.95%			-5.95%
(per troy ounce)
Wheat			$7.8900			$8.0825			-0.66%			-0.66%
(per bushel)
Corn			$6.0200			$6.1925			-4.29%			-4.29%
(per bushel)
Crude oil			$88.38			$90.30			-3.28%			-3.28%
(per barrel)