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Market Update by Miriam Gottfried and Will Swarts
Stocks Nearly Flat on Tepid Earnings Start
News at a Glance
- Tight Range: Stocks retain small gains.
- Earnings Season: Little to cheer, retail weakens.
- Oil Roils: Swings near $60 in afternoon trading.
- Job Claims: New jobless report improves slightly.
The Lowdown
Stocks hung on to minor gains Thursday in a lightly traded session marking the start of what could be a lackluster earnings season.
Retailers reported same-store sales for June, and the results were disappointing but unsurprising. More retailers reported sales declines than advances for the last month. From Abercrombie & Fitch (ANF) to Zumiez (ZUMZ), sales hit double-digit drops. Wal-Mart (WMT) stopped offering monthly sales figures, leaving Target (TGT) as the largest retailer to report. It posted a 6.2% same-store sales drop.
The Dow Jones Industrial Average closed up 5 at 8183, while the Nasdaq finished up 5 at 1753 and the S&P 500 was up 3 at 883.
Alcoa (AA) posted better than expected results to begin a wave of second-quarter earnings reports, but the Dow component's third consecutive loss left traders discouraged. Its Wednesday afternoon reported loss of 26 cents a share, not the Street consensus estimate of 38 cents a share, surprised traders and analysts but didn't spur much activity. Alcoa is traditionally seen as an economic bellwether and an indicator for second-quarter releases to come.
Oil prices wavered after data released by the Energy Department Wednesday suggested weak demand. Crude traded on the Nymex traded at up 16 cents at $60.57 a barrel as of 4:10 p.m.
Corporate News
- Goldman Sachs (GS) got an upgrade from analysts at Bank of America (BAC), which boosted it to Buy from Neutral, shoring up financial stocks.
- AIG (AIG) has restarted talks to sell its American Life Insurance unit to MetLife (MET), a deal which could help the insurer raise more than $15 billion, the Financial Times reported Thursday. Talks between the two companies fell apart earlier this year because of a disagreement about the sale price.
- Costco (COST) reported that June same-store sales fell 6% as customers held off on pricier items like cameras and cell phones. The warehouse retailer saw sales slip 6% in the U.S. and 3% internationally. The declines were in line with analysts' expectations.
The Economy
- The initial jobless claims for the week ending July 4 were 565,000, down from the revised 617,000 for the previous week, the Labor Department said Thursday. Forecasters expected the number of first-time filings for state unemployment benefits to come in at 603,000. REPORT
- The Commerce Department reported better than expected figures on wholesale inventories for May, which declined 0.8%, less than the 1.0% estimated decline. They declined 1.4% in the previous month. REPORT
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