Stocks gain despite weak retail sales, jobless claims

A late surge pushes the Dow up 22 on the day. December retail sales rose just 0.1%. Jobless claims jump to 399,000. Delta Air may be looking at buying AMR. Chevron drops on an earnings warning. Apple will test mini-stores at Target.

By Charley Blaine Jan 12, 2012 2:23PM
Charley BlaineUpdated: 11:50 p.m. ET

Stocks finished modestly higher this afternoon despite a surprising jump in jobless claims and a report showing December retail sales were less robust than expected.

The three major indexes moved higher, and the Standard & Poor's 500 Index ($INX) closed above an important resistance level. In addition, specialized groups of stocks, including semiconductors and transportation shares, moved up.

Delta Air Lines
(DAL) shares closed up 26 cents to $8.87 on a Wall Street Journal report that the company is looking at bidding for American Airlines parent AMR (AMR), which filed for bankruptcy protection in November. US Airways (LCC) also is said to be interested.

Tech shares were higher overall, but gains for Google (GOOG), Qualcomm (QCOM) and Microsoft (MSFT) were offset by declines in Apple (AAPL), Amazon.com (AMZN) and Intel (INTC). (Microsoft publishes MSN Money.)

Gold
(-GC) moved higher. Crude oil (-CL), however, dropped below $100 on news that European countries may not be able to implement an embargo against Iranian oil imports for six months.

The Dow Jones industrials ($INDU) closed up 22 points to 12,471. The S&P 500 gained 3 points to 1,296. Meanwhile, the Nasdaq Composite Index ($COMPX) was up 14 points to 2,725, and the Nasdaq-100 Index ($NDX) added 10 points to 2,382.

Article continues below.
Delta Air is one of two companies looking at making an offer for AMR. The other is private equity firm TPG Capital, the Journal said.

Both sense that AMR's troubles present another opportunity for airline consolidation, the report said.

But any bid by Delta for American Airlines' parent would generate a host of antitrust problems that may be too complex to overcome.

Traders are looking forward to Friday's important earnings report from banking giant JPMorgan Chase (JPM). The report comes out before the open. The company is expected to reporting earnings of 91 cents a share for the fourth quarter, down from $1.12  a year ago. Revenue is expected at $23.05 billion, down from $26.72 billion a year ago.

The earnings drop should mostly reflect lower trading volumes and possible write-downs of some of its loans. Analysts will be interested in the health of its credit-card and mortgage businesses.

The report is the first from the biggest U.S. banks. Most report next week, starting with  Citigroup (C) on Tuesday, US  Bancorp (USB) and Goldman Sachs (GS) on Wednesday and American Express (AXP) and Bank of America (BAC) on Thursday.

Bank of America has struggled since the 2008 financial crash. Late Thursday, The Wall Street Journal reported that the company, the nation's second-largest by assets, had told regulators it would consider withdrawing from some markets if its troubles deepened. That's not likely but is a sign of how serious its problems were. The bank has suffered from overly rapid expansion and some disastrous deals , especially the 2008 acquisition of Countrywide Financial.

The January rally continues

Stocks struggled for much of the day despite decent news from Europe. Auctions of debt in Italy and Spain went well. European stocks, especially bank stocks, were higher. The euro rallied against the dollar.

The Dow's gain, though small, was its sixth in eight sessions. The S&P 500 enjoyed its seventh gain in eight sessions. The Nasdaq's gain was its sixth in a row and seventh in eight sessions.

The Dow is up 2.1% for the year, with the S&P 500 up 3% and the Nasdaq up 4.6%.

The S&P 500's performance was perhaps the most important of the day. The index had been struggling today to close above 1,292.66, its intraday high of Oct. 27, 2011. After several attempts, it succeeded today and may be headed to 1,300.  

It's not uncommon for a stock or index to push above an important resistance level -- a level that typically triggers selling.

Energy prices -- New York close



Thur.

Wed.

Month chg.

YTD chg.
Crude oil (-CL)

$99.10

$100.87

0.27%

0.27%
(per barrel)











Heating oil (-HO)

$3.0541

$3.0646

4.80%

4.80%
(per gallon)











Natural gas (-NG)

$2.6970

$2.7740

-9.77%

-9.77%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.7313

$2.7633

2.78%

2.78%
(per gallon)











Brent crude 

$111.26

$112.24

3.61%

3.61%
(per barrel)











Retail gasoline

$3.3820

$3.3720

3.46%

3.46%
(per gallon; AAA)












Oil drops after Iranian embargo may be delayed
Crude oil settled down $1.77 to $99.10 a barrel, its biggest drop in two weeks, after a proposed European Union embargo of Iranian oil imports was said to be delayed. Brent crude dropped $1.60 to $110.64.

The United States and others are pushing for an embargo to get Iran to halt its nuclear development program. 

Brent crude
settled down 98 cents to $111.26.

Natural gas
(-NG) slumped 7.7 cents to $2.697 per million British thermal units as gas producers struggle with way too much production in a relatively mild winter.

Crude oil is up 0.3% this month; natural gas is off 12% this week alone. Retail gasoline was at $3.382 a gallon, up from Wednesday's $3.372, according to AAA's Daily Fuel Gauge Report. That's up 3.5% this month and 9.3% from a year ago.

Gold settled up $8.10 in New York to $1,647.70 an ounce. Silver (-SI) settled at $30.124 an ounce, up 23.4 cents. Copper (-HG) settled up 10.3 cents to $3.649 a pound.

Gold is up 5.2% so far this month, with silver up 7.9% and copper up 6.2%.

With the euro rally against the dollar, U.S. interest rates were higher, with the 10-year Treasury yield hitting 1.933% from 1.904% on Wednesday.

Retail sales in December are a downer
While the jobless claims report was a disappointment, the retail sales report was more dismaying.

The report showed a 0.1% gain in December from November and suggested heavy discounting all through the month. Many retailers have cited a very "promotional" sales environment during the holiday shopping season. And it raised the possibility that consumers were more cautious than thought. You see that in upward revisions in October and November.

That's a signal of careful plotting of shopping before the crush as well as strategic buying like over the Thanksgiving weekend.

But Nomura Securities noted that sales were up 6% from a year earlier.

Jobless claims jumped to a seasonally adjusted 399,000 for the week ended Jan. 7 from 375,000 the week before. Many economists weren't worried about the gain. Jobless claims typically rise in the first week of January. It's the next few weeks worth watching.

Materials, telecom stocks lead the market
Metals stocks were the market leader, with Alcoa (AA), up 30 cents to $9.93, as the top performer among the 30 Dow stocks. The stock is up 14.8% since Dec. 30. Freeport-McMoran Copper & Gold (FCX) was up 80 cents to $42.45.

Energy shares were the weak link because of the slump in natural gas prices. Chevron was the worst-performing Dow stock and eighth-worst among S&P 500 stocks. Drilling company Helmerich & Payne (HP) was the worst S&P 500 performer.

Jacobs Engineering (JEC) was the top S&P 500 performer, up $2.16 to $43.47, followed by Ingersoll-Rand (IR) and communications-chip-makerBroadcom (BRCM), up $1.60 to $32.66 on an analyst upgrade.

Fossil (FOSL), the maker of watches and jewelry, was the top Nasdaq-100 performer. Shares jumped $7.41 to $86.78 after executives told a New York conference that it hasn't seen a slowdown in Europe. Its primary market in Germany  is "solid."

Apple to have mini-stores in Target
Target (TGT) confirmed that Apple would be setting up some mini-stores within selected stores where the overall market isn't big enough to support a stand-alone Apple store.

The mini-stores are part of a "Shops at Target" concept that Target unveiled today at a presentation in New York. The strategy will include shops within its discount stores selling everything from dog treats to high-end home accessories.

Target was up 78 cents to $49.81. Apple fell $1.16 to $421.39.

Sears suppliers lose a financing source
Sears Holdings
(SHLD) fell after Bloomberg News reported that suppliers will no longer be able to get loans or payment guarantees from CIT Group (CIT) for their shipments to the retailer.

But the stock recovered to finish at $34, up $1.10. One reason may be a comment from Matthew McGinley, managing director at International Strategy & Investment Group in New York. McGinley told Bloomberg News that Sears has enough liquidity that it will weather the situation.

Leaders and laggards
Oil giant Chevron (CVX) fell $2.80 to $104.97. The company expects fourth-quarter earnings to come in "significantly below" the third quarter because of lower profit margins and refinery input volumes in its downstream business.
 
Royal Bank of Scotland (RBS) plans to cut 3,500 jobs over the next three years as it scales back its investment banking arm. The bank is 83%-owned by the British government. RBS shares rose 37 cents to $7.17 in New York.
 
Regions Financial (RF) will take an impairment charge of $575 million to $745 million in the fourth quarter from the $930 million sale of its Morgan Keegan brokerage unit to Raymond James Financial (RJF). Regions, set to report earnings on Jan. 24, may lose as much as $633 million -- or up to 50 cents a share -- in the quarter as a result. Regions shares fell 11 cents to $4.69. Raymond James dropped $1.22 to $32.96.
 
Tractor Supply (TSCO) rose $7.27 to $80.20. The company boosted its guidance late Wednesday for the full year following strong fourth-quarter sales. The company now sees earnings of $2.97 to $2.99 a share for fiscal 2011. The Street estimate is $2.91.

The Obama administration is likely going to block pharmacy-services provider Omnicare's (OCR) proposed $716 million offer for PharMerica (PMC), the New York Post reported. Omnicare said Wednesday it wouldn't complete its $15 a share offer until the FTC concluded its probe. Omnicare was off $2.46 to $32.90; PharMerica fell $1.23 to $13.74.

Short hits from the markets -- New York close



Thur.

Wed.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.0300%  0.010%

200.00%  200.00%
5-year Treasury note 

0.835%  0.819%

0.60%  0.60%
10-year Treasury note

1.933%  1.904%

3.31%  3.31%
30-year Treasury bond

2.980%  2.959%

3.15%  3.15%
Currencies











U.S. Dollar Index

81.036  81.614  0.64%  0.64%
British pound

1.5342  1.5333  -1.26%  -1.26%
(in U.S. $)

          
U.S. $ in pounds

£0.652  £0.652  1.27%  1.27%
Euro in dollars

$1.28  $1.27  -1.13%  -1.13%
(in U.S. $)

          
U.S. $ in euros

€ 0.781  € 0.787  1.14%  1.14%
U.S. $ in yen 

76.86  76.88  -0.31%   -0.31%
U.S. $ in Chinese

6.34  6.31  0.20%  0.20%
yuan

            
Canada dollar

$0.983  $0.000  0.25%  0.25%
(in U.S. $)

          
U.S. dollar 

$1.018  $1.018  -0.24%  -0.24%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,647.70

$1,639.60

5.16%

5.16%
(per troy ounce)











Copper (-HG)

$3.649

$3.546

6.20%

6.20%
(per pound)











Silver (-SI)

$30.1240

$29.8900

7.91%

7.91%
(per troy ounce)











Wheat (-ZW)

$6.0500

$6.4100

-7.32%

-7.32%
(per bushel)











Corn (-ZC)

$6.1150

$6.52

-5.41%

-5.41%
(per bushel)











Cotton 

$0.9525

0.9643

3.89%

3.89%
(per pound)











Coffee

$2.3665

2.3755

3.05%

3.05%
(per pound)











Crude oil (-CL)

$99.10

$100.87

0.27%

0.27%
(per barrel)










 

90Comments
Jan 12, 2012 5:11PM
avatar

As a math major, one of my courses was Probability & Statistical Analysis. Today’s Global Economy and financial system has become so intertwined that problems in one sector of our Global economy can have a profound effect on other sectors. An example is our housing market collapse, which had a profound effect on Europe and the Euro. Our own considerable debt raises the probability that we could still have a financial melt down, the likes of which the world has not seen. Our National Debt is now accelerating at an exponential rate. Any Engineer or Mathematician will tell you that in their fields, there can only be a destructive outcome if this continues. I don’t like the probabilities I see when I do the math. The probabilities can improve if our government stops their political bickering, addresses the problem, and begin now to de-accelerate the yearly rate of change of our National debt.

Jan 12, 2012 7:22PM
avatar

SURPRISE-- THE R WORD AGAIN!!!

 

Geez get over it. People HATE him because:

 

a) Liar

b) Socialists

c) LIAR

d) clueless

e) a NON leader

 f) incompetent

Jan 12, 2012 6:55PM
avatar
President Barack Obama asked Congress Thursday for another $1.2 trillion increase in the nation's debt limit.


This is the best he can come up with?

Sad.

Vote him out 2012.
Jan 12, 2012 4:36PM
avatar

Things to watch in First Quarter.

Quote: Chao Deng Article 01/12/2012, Stocks Waver on Lackluster US Data”

Initial jobless claims for the week ending Jan. 7 rose by 24,000 to 399,000, according to the Labor Department. The weekly read came in slightly higher than economists' expectations for 375,000, according to a poll by Thomson Reuters. The prior week's figure was upwardly revised to 375,000 from 372,000. In a disappointing report from the Commerce Department, U.S. retail sales for December slumped to their weakest read since May 2011. Sales rose 0.1% in December, compared to a revised 0.4% rise in November. Economists had expected sales to rise 0.3% with the help of discounts during the holiday season. Retail sales excluding car sales dropped for the first time since May 2010, declining 0.2% in December after rising 0.3% in the prior month. Business inventories came in slightly lower in expectations for December. The Commerce Department said that inventories rose 0.3%, compared to the 0.4% gain forecasted. The increase extends a 0.8% gain from October.

My Comments

IMO, the Global economy is presently a whirlpool with the European economy near the middle and the Greek Tragedy Economy about to be sucked in to the void. The US economy is in the rough waters near the edges of the whirlpool, trying, with one paddle, to make it’s way into the safety of calmer waters. The above data suggests weakness, which if it continues, will reverse the gains in the markets made late last year. I am especially concerned that Inventories are increasing. While these inventories typically rise in the fourth Quarter, I would expect them to return to normal levels in the First Quarter after a successful holiday season. However, the lower than expected sales in December suggest inventories should remain somewhat inflated, causing retailer’s to continue their discounts through the first quarter. If demand remains low and Inventories remain high, we can expect unemployment to rise in the first quarter and continue into the second quarter. In addition, the price of gasoline has a considerable probability of rising, further reducing consumer spending. Finally, the considerable rise in consumer debt reported last week suggests consumers will use the first quarter paying down debt. And none the above even addresses the great unknown --- our government’s indecision on how to address the economy and the creation of jobs. For these reasons, I continue my reduced exposure to the stock market and sit on my profits from late last year.

Jan 12, 2012 7:38PM
avatar
I commented here a couple weeks ago when the obama media was saying the economy was improving cause there was hiring in nov/dec. LOL the obama kool aid drinkers called me a racist  , because I pointed out the obvious to anyone with 1/2 a brain(odumbo voters excluded)Unemployment benefits are running out for thousands daily, they dont count as unemployed anymore under the odumbo presidency, just like the prices of things that everyone buys food,gas, energy going up through the roof ,no longer counts as inflation. just to make this fail potus look good.My comment was watch for februarys job numbers when the Christmas TEMP workers lose their jobs unemployment will go up. HAHA told ya so.MSN would have front page news if the opposite was true, so we have a tiny little footnote on jobs numbers, so go ahead obamatons, dont recommend
Jan 12, 2012 7:49PM
avatar
$1.2 trillion in budget hike......OMG He just won't stop.!!!!
Jan 12, 2012 7:47PM
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OMG Obama wants how much more???? This man will not stop!! Sorry fellow Americans, I just cannot believe this man!  I hope Americans survive this truly...how much longer can we hold out??? Washington is raping Americans.....Better get mad folks......
Jan 12, 2012 7:26PM
avatar
Funny how I read that retail sales hit a record and recent job hirings overshadowed jobless claims.
Charley you are a puppet reporting regurgitated nonsense... lies.

The media sucks whether it's in your face or online... bunch of lying whores.
Jan 12, 2012 7:26PM
avatar

Inherit and Racism

 

is the new Hope and Change

 

Fool me once----

Not this time pal.

His real slogan should be:

 

One and Done!

Jan 12, 2012 5:35PM
avatar
 Any Engineer or Mathematician will tell you that in their fields, there can only be a destructive outcome if this continues. I don’t like the probabilities I see when I do the math. The probabilities can improve if our government stops their political bickering, addresses the problem, and begin now to de-accelerate the yearly rate of change of our National debt.

I concur.

Jan 12, 2012 4:34PM
avatar
The Stock Market is a joke.  All is not well. Obame wants to give middle class a tax break. Middle Class is paying more for gas and electricity all consumer goods because of obame. Its called  slight of hand or talking from both sides of your mouth, or just being STUPID.  Why do you think unemployment is so high? and prices are high also.    Ask the community organizer in chief  lol
Jan 12, 2012 4:41PM
avatar
LOL wow, oil dumps price in the last hour or so because Europe is postponing an embargo against Iran!  What about the Nigerian strike, what happened to that!  Who is playing us?
Jan 12, 2012 3:48PM
avatar
I can't believe that there are still people who don't  see that everything now is GLOBAL. 
Jan 12, 2012 3:55PM
avatar

Calzita:

...and these people vote and procreate....thus leading to the weakening of the nation.  Most can't spell either.

Jan 12, 2012 11:31PM
avatar
Yeah I saw that.....Russian tanker...US Coast Guard ice cutter?...Hope they make it. 
Jan 12, 2012 3:42PM
avatar

Headline:

 

"End of the World Postponed One More Day".

 

."..just you wait", says D&G'r, "someday I'll be right."

 

 

Jan 12, 2012 8:04PM
avatar
Interesting.....I see NO PLACE to comment on the article...."Obama to ask for a budget hike of $1.2 trillion..... No place to comment!
Jan 12, 2012 9:11PM
avatar

Well, here we are again with yet another MSN (see: shill media) sell-side market pumping "all's-well" recap.

-Not one mention of historical low volume?  (hint: a few block shares by big banks moves market up into close fast)

-How about that we breached the debt limit again?

-399K jobs?  Really? 399,000?  Talk about manipulation.  Who wants to bet the other side of my conviction that the revision next week will put it well over 400K?

-How about that this whole "rally" has been nothing but a short covering since market short interest has crashed since beginning of Dec..

 

MSN is nothing more than an extention of Cramer..without the sound effects and coked-up like school girl behavior. 

 

Read Zero Hedge...get the truth.

Jan 12, 2012 4:10PM
avatar
We are trying to hang in there and end the day in the green...Still a long hour to go and by what we see, not an easy task....Oh well, we will find out soon enough...More after the close.
Jan 12, 2012 4:05PM
avatar
So if you're so afraid of Europe's demise, then why do you make poor investment decisions then come on here and complain. Don't invest if all is Doom and Gloom in your world.
Trade wisely and you won't get burned by what you fear!

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