Stock market up modestly after poor jobs reportby Stephen Bernard on May. 14, 2009, under Edge, Special
NEW YORK – Stocks traded modestly higher Thursday morning amid a worse-than-expected weekly unemployment report left investors with little reason to continue a two-month rally.
The Labor Department’s weekly jobless claims data showed more workers filed last week for benefits than anticipated. New claims jumped to 637,000, above what economists had anticipated.
The number of people overall seeking unemployment benefits also grew faster than expected, increasing to 6.56 million, while continuing claims hit a 15th consecutive record.
Stocks had tumbled on Wednesday, sending the Standard & Poor’s 500 index down 2.7 percent, after the Commerce Department said retail sales unexpectedly fell in April for the second straight month, while a separate report showed home foreclosures on the rise.
The twin hits to two key areas of the economy — consumer spending and the ailing housing market — led investors to drop stocks and seek the shelter of bonds, putting on hold a two-month rally that has sent the Dow Jones industrial average spiking 31 percent off of 12-year lows reached in early March, the markets biggest short-term jump since the Great Depression.
A separate report Thursday also showed inflation at the wholesale level jumped more than expected in April. Wholesale prices rose 0.3 percent last month, larger than the 0.1 percent analysts had expected.
Market indicators gave up some early gains and were trading in a narrow range.
In morning trading, the Dow Jones industrial average rose 38.94, or 0.47 percent, to 8,323.83. The Standard & Poor’s 500 index rose 5.14, or 0.58 percent, to 889.06, while the Nasdaq composite index rose 16.53, or 0.99 percent, to 1,680.72.
A two-month rally has stalled in recent days amid worries that the economy would not recover as quickly as hoped.
Investors also received some insight into consumer spending as retailer Wal-Mart Stores Inc. reported first-quarter results that met analysts’ expectations. Wal-Mart earned $3.02 billion, or 77 cents per share.
Wal-Mart had been performing better than most retailers during the ongoing recession. It shares fell 4 cents to $49.99.
Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume came to 187.7 million shares.
The market was battered Wednesday by a worse-than-expected report on monthly retail sales for April. Economists had been expecting sales to remain flat in April, but they instead fell 1.2 percent. March figures were also revised lower.
Also, department store chain Macy’s Inc. reported Wednesday that its first-quarter loss widened from the year-ago period, a further sign consumer spending is not rebounding. Consumer spending accounts for about two-thirds of U.S. economic activity, so a rebound in sales is a key indicator that the economy might be strengthening.
Bond prices were mixed after rising a day earlier. The yield on the benchmark 10-year Treasury note fell to 3.10 percent from 3.12 percent late Wednesday. The yield on the three-month T-bill rose to 0.17 percent from 0.16 percent late Wednesday.
The dollar mostly rose against other major currencies, while gold prices fell.
The Russell 2000 index of smaller companies fell 1.45, or 0.31 percent, to 470.37.
Overseas, Japan’s Nikkei stock average fell 2.6 percent. In afternoon trading, Britain’s FTSE 100 fell 0.1 percent, Germany’s DAX index dropped 0.6 percent, and France’s CAC-40 slipped 0.2 percent.
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