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Stocks open lower as weekly jobless claims rise

February 06, 2009|Associated Press

Wall Street is getting a little daring once again.

Investors shook off weak economic readings Thursday and placed bets on retail and technology stocks after several companies posted better-than-expected sales and profit reports. The major indexes gained more than 1%, with the Dow Jones industrial average rising 106 points.

Such retailers as Wal-Mart Stores and Macy's turned in better-than-expected sales figures for January.

Wal-Mart's sales beat Wall Street forecasts after the chain drew shoppers focused on necessities like groceries. Macy's, which this week said it would slash 7,000 jobs, on Thursday raised its fourth-quarter and full-year forecasts.

The industry's overall numbers were still weak as consumers again curtailed their spending, but not as bad as investors had feared when they beat retail stocks down in recent months.

"We're being overly pessimistic on things like retailers," said Chris Cordaro, chief investment officer at RegentAtlantic Capital. "People realize you're going to have to shop somewhere."

The technology-laden Nasdaq composite index led the major market indicators after Akamai Technologies said its fourth-quarter earnings rose a better-than-expected 13% as more customers signed up for its Internet traffic-management services.

The reports helped the market overcome a flurry of bad economic news. Unemployment benefits claims rose last week to a 26-year high, and factory orders fell for the fifth straight month in December. But productivity rose 3.2% in the fourth quarter, more than twice what analysts had expected.

The Dow rose 106.41, or 1.3%, to 8,063.07. The blue chips fell as much as 111 points early in the session, hitting their lowest level during trading since Nov. 21. Many investors hope the November lows will hold as the lowest point in the stock market's decline from its October 2007 high.

Broader stock indicators also rose. The Standard & Poor's 500 index rose 13.62, or 1.6%, to 845.85, and the Nasdaq composite index rose 31.19, or 2.1%, to 1,546.24.

The Russell 2000 index of smaller companies rose 6.60, or 1.5%, to 455.08.

Bond prices were mixed Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite to its price, fell to 2.92% from 2.94% late Wednesday.

Bank stocks moved higher. JPMorgan Chase rose 50 cents to $24.54, and PNC Financial Services Group climbed $1 to $29.83. MasterCard jumped $19.69, or 14%, to $159.84 after its fourth-quarter earnings easily topped Wall Street's expectations.

Retailers climbed after issuing their sales reports. Wal-Mart gained $2.14, or 4.6%, to $48.56, while Macy's climbed 43 cents, or 5.2%, to $8.75. Target rose 95 cents, or 3%, to $32.29. Discount clothing retailer Ross Stores leaped $2.38, or 8.4%, to $30.63.

Among tech stocks, Akamai rose $2.56, or 18%, to $16.73.

The dollar was mostly higher against other major currencies. Gold prices also climbed.

Light, sweet crude rose 85 cents to settle at $41.17 a barrel on the New York Mercantile Exchange.

Overseas, Britain's FTSE 100 edged up 0.01%, Germany's DAX index rose 0.4%, and France's CAC-40 slipped 0.1%. Japan's Nikkei stock average fell 1.1%.

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