U.S. Stocks Decline On Weak Retail Sales, Capital One Warning
NEW YORK (MarketWatch) -- U.S. stocks lost ground on Thursday after credit-card issuer Capital One Financial Corp. undershot its profit forecast and major retailers reported weak December sales, intensifying concerns about the economy's malaise.
"The numbers aren't Chicken Little bad, but we were looking for better than we saw for December; if we have a concern in this environment, it's the consumer," said Art Hogan, chief market strategist at Jefferies & Co., of same-store sales figures.
"And there's general concern that Capital One is giving us bad news on the financial front," said Hogan.
The Dow Jones Industrial Average fell 23 points to 12,712.2, with 21 of its 30 components posting losses, with blue-chip decliners led by American Express Co. , off 2.1%.
The S&P 500 slipped 7.88 points to 1,401.25, while the Nasdaq Composite weakened by 18.22 points to 2,456.33.
Volume on the New York Stock Exchange had reached 562 million shares, with declining stocks outpacing advancing issues 3 to 1. On the Nasdaq, 796 million shares had changed hands, and decliners topped advancers, by a 9-to-5 ratio.
Wholesale gains
Equities trimmed early losses after the Commerce Department reported sales of U.S. wholesalers gained 2.2% in November, the biggest jump in two years.
The government reported weekly initial claims for state unemployment benefits fell to a two-month low, while continuing claims climbed to two-year highs. .
"Today's U.S. reports bucked the market trend toward gloom and doom, with a big drop in claims and jumbo surge in wholesale sales that bode well for the economy," said analysts at Action Economics.
In trading on the New York Mercantile Exchange, gold futures gained 0.4% to $884.9 an ounce.
Crude-oil futures were down 2.2%, putting pressure on energy stocks but bolstering the fortunes of other categories.
U.S. stocks had climbed Wednesday on a late-session buying binge in what many viewed as an oversold market, with the Nasdaq Composite chalking up its first gain of the year.
Federal Reserve Chairman Ben Bernanke is slated to deliver a speech on the economy at 1 p.m. Eastern.
Retailers unveiled data on their December same-store sales performance, and some -- Pacific Sunwear , Limited Brands and Stein Mart -- pared their quarterly profit outlooks accordingly.
Wal-Mart Stores said profit will feel some pressure from higher interest rates in the fourth quarter, but it reaffirmed its fourth-quarter earnings view.
Capital One shares dropped 9%. The credit-card issuer cut its earnings forecast for the year by more than 20%, noting it plans to take a $1.9 billion provision in the fourth quarter for loan losses.
Investors also will consider a Wall Street Journal report that Citigroup and Merrill Lynch & Co. are both negotiating further capital injections from overseas investors.
By Kate Gibson