U.S. Stocks Open Mostly Lower Amid Profit-taking And Rising Oil
NEW YORK (MarketWatch) - U.S. stocks drifted mostly lower at Thursday's start, after the stock market's largest two-day jump in five years, as a spike in crude-oil prices and a 99% profit drop at Sears Holdings dampened investors' enthusiasm.
"After yesterday's surge there will likely be some minor profit-taking during the course of the day; [the rising price of] oil is going to restrain further upward movements, at least at the opening," said Peter Cardillo, chief market economist at Avalon Partners.
"The market is going to be data dependent today and most likely hold on to a good portion of yesterday's gains," said Cardillo, who cited E-Trade's infusion of capital and a stronger dollar as positives for the equities market.
Shortly after the opening bell, the Dow Jones Industrial Average was down 16.2 points, or nearly 0.1%, to 13,273.3.
The S&P 500 declined 2.09 points to 1,466.93, while the Nasdaq Composite edged 1.09 points higher to 2,664.00.
On Wednesday, U.S. stocks surged for another day, with the Dow tallying its biggest two-day gain since 2002, as investors cheered Federal Reserve talk seen as signaling a further interest-rate cut next month.
Stock futures retained losses after early data had the government reporting a rise in weekly jobless claims to near two-year highs, along with an upward revision in third-quarter U.S. economic growth to 4.9%. .
Later data includes new-home sales for October.
Fed speak
More Fed talk was expected after Thursday's close, with Governor Frederic Mishkin and Fed Chairman Ben Bernanke slated to speak.
Crude-oil futures rallied as much as $4 a barrel after a fire crippled a key pipeline bringing Canadian oil into the United States operated by Enbridge
.
On the New York Mercantile Exchange, crude futures were up $1.98 at $92.60 a barrel in early action.
The dollar extended gains against rivals including the euro, the British pound and the Japanese yen.
Active issues
Of companies in the spotlight, Sears shares fell nearly 15% after it posted a 99% profit decline during the third quarter, leading the retailer to say it was "very disappointed." Sears said it wasn't just the broader economy and the retail environment to blame, and noted that margins declined.
H.J. Heinz reported a better-than-forecast 19% profit rise.
Brown Forman , the maker of Jack Daniel's and Southern Comfort, Wednesday night announced a $200 million stock buyback and also narrowed its earnings forecast.
After the close of trade, Dell will report quarterly results.
General Motors rose 1.1% after it was upgraded to peer perform from underperform at Bear Stearns.
Stake buying was the theme in financials, as Citadel will swap $2.5 billion to increase its stake in E-Trade Financial to nearly 20%, and China's Ping An Insurance invested $2.7 billion in Belgian-Dutch group Fortis.
E-Trade shares surged 11%.
Men's Wearhouse forecast earnings below analyst estimates, while TiVo narrowed its third-quarter loss.
In overseas trading, the Nikkei 225 climbed 2.4% following the Wall Street rally, while the FTSE 100 was up a slender 0.1% in London.
By Kate Gibson