Stocks were flat Thursday as traders closely watched the price of oil, which has soared in the past few trading sessions, and weighed mixed news on retail sales.
Wal-Mart Stores (WMT) saw same-store sales increase 3.2% in April as American consumers sought bargains at the discount retailer. Sales were up 3.8% including fuel, and total company sales jumped 9.8%. The giant chain expects May same-store sales excluding fuel in the range of flat to 2% positive.
U.S. initial jobless claims fell 18,000 to 365,000 last week. The jobless claims data "frustrated the view that the labor market is tracking a recession scenario," says Action Economics. If the economy was headed for a recession, and not just a slowdown, jobless claims should be in the 400,000 to 475,000 range by now, Action said. Bear Stearns economist John Ryding was claims "remain elevated" but "do not suggest, at this point, an intensification of economic weakness as May commenced."
After a sell-off on Wednesday, stocks opened higher Thursday but then turned lower later in the morning. The Dow Jones industrial average was down 0.9 points, or 0.01%, to 12,813.45. The broader S&P 500 index edged down 0.47 points, or 0.03%, to 1,392.10. The tech-heavy Nasdaq composite index lost 0.2 points, or 0.01%, to 2,438.29.
Oil hit a record above $123 per barrel on Wednesday, which helped sink stock prices. On Thursday morning at the NYMEX, crude oil for June delivery was down 40 cents, to $123.13 per barrel.
U.S. Treasury Secretary Henry Paulson said the credit crisis is "closer to an end" than a beginning. "This is a tough quarter," he told a television interviewer Thursday, but the federal stimulus package should boost growth.
Among other stocks in the news Thursday, Target (TGT) saw same-store sales rise 3.1% in April and total sales increased 9%.
McDonald's Corp. (MCD) posted a 2% increase in U.S. same-restaurant sales, with global sales up 5%. Total system-wide sales jumped 14% from a year ago.
Best Buy (BBY) plans a venture with the Carphone Warehouse. Best Buy will buy 50% of the firms retail interests in the U.S. and Europe for $2.1 billion and create a new company.
Crocs, Inc. (CROX) posted earnings of 9 cents per share, vs. 31 cents a year ago, as profit margin narrowed but revenue still rose 40%. Crocs says it still expects earnings of $1.54 to $1.64 per share this year.
Illinois Tool Works (ITW) plans to buy Enodis PLC in a $2.3 billion deal.
New York & Company's (NWY) same-store sales dropped 6.6% in the first quarter, and total sales fell 1.5%. The retailer expects earnings to increase 25% in the quarter, due to an improvement in profit margins.
Major European indexes were narrowly lower Thursday. In London, the FTSE 100 index fell 0.21% to 6,247.70. Paris' CAC 40 index fell 0.72% to 5,038.76, and Germany's DAX index dropped 0.58% to 7,035.17.
In Asia, Japan's Nikkei 225 lost 1.13% to 13,943.26, and Hong Kong's Hang Seng index fell 0.63% to 25,449.79.
Treasury market
Treasury prices were narrowly higher on Thursday despite the drop in jobless claims. The ten-year note gained 07/32 to 100-07/32 for a yield of 3.85%, while the 30-year bond lost 02/32 to 96-10/32 for a yield of 4.6%.