Except for Wal-Mart, it wasn't a bad day for the stock market.
In fact, Wal-Mart Stores (WMT, news, msgs), down 7.5% to $51.38, was the key reason that the Dow Jones industrials lost 27 points to 8,742 today. Wal-Mart's swoon subtracted 33 points from the blue-chip index.
The Standard & Poor's 500 Index was up 3 points to 910, and the Nasdaq Composite Index was up 18 points to 1,617.
Wal-Mart shares fell after it missed big on its December same-store sales numbers -- a result a weakening economy and bad weather. Sales grew 1.7% at stores open at least one year, well below the 2.8% gain analysts had expected. Last month it forecast that sales would rise between 1% and 3%.
Today was Wal-Mart's worst loss since Oct. 15 and its fifth-worst daily loss since 2000.
The performance cheered market technicians who noted:
- The S&P 500 briefly dropped below 900 but pushed above that level, a signal of market support.
- The Dow, S&P 500 and Nasdaq all finished above their 50-day moving averages for the sixth straight day.
The market's resilience in the face of difficult news will face a big challenge on Friday when the Labor Department reports on non-farm payrolls and unemployment for December. Economists believe the report will show a loss off 520,000 jobs in December, on top of a loss of 533,000 jobs in November.
The job losses -- and the fear of losing jobs -- is causing consumers to pull back dramatically on their spending and borrowing. The latter dropped by a record $7.9 billion in November as Americans scrambled to boost savings in face of the deepening recession and amid an investor exodus from securities backed by credit-card and other loans, the Federal Reserve said today.
The slump brought consumer credit down to $2.57 trillion, and capped the first back-to-back monthly decline since 1992.
Fifteen of the 30 Dow stocks were higher this afternoon, led by Alcoa (AA, news, msgs), up 4.3% to $11.36, along with 324 S&P 500 stocks and 67 Nasdaq-100 ($NDX.X) stocks.
Crude oil, meanwhile, was down 2.2% to $41.70 a barrel in New York. The decline came on top of a 12.2% loss on Wednesday, crude's biggest one-day percentage drop in more than seven years. Energy stocks were largely higher, with refiners the leaders.
President-elect Barack Obama spoke about the economy this morning and said that while his economic stimulus plan will be costly and will add to the nation's deficit, the recession could last years without it.
"This recovery plan alone will not solve all the problems that led us into this crisis," Obama said. "We must also work with the same sense of urgency to stabilize and repair the financial system we all depend on. That means using our full arsenal of tools to get credit flowing again to families and business, while restoring confidence in our markets."
To delay, he warned, "more Americans will lose their jobs. More families will lose their savings."
| Thur. | Wed. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Crude oil (NYMEX) (per barrel) | $41.70 | $42.63 | -$0.93 | -6.50% | -6.50% |
| Heating oil (per gallon) | $1.5196 | $1.5431 | -$0.0235 | 8.10% | 8.10% |
| Natural gas (per million BTU) | $5.5830 | $5.8720 | -$0.2890 | -0.69% | -0.69% |
| Unleaded gasoline (per gallon) | $1.0882 | $1.0764 | $0.0118 | 7.93% | 7.93% |
Citigroup OKs a deal for mortgage rewrites
Citigroup (C, news, msgs) reached a deal with top Senate Democrats on a measure that would allow judges to set new repayment terms for millions of mortgage holders who wind up in bankruptcy court.The deal, Senate staffers told The Journal, is likely the first of several measures being crafted this year that propose to trim the principal owed by homeowners saddled with mortgages larger than the current value of their house.
The Wall Street Journal noted that the deal marks a surprising change of direction by the financial-services industry.
Banks have consistently fought such legislation, saying cramdowns -- bankruptcy plans approved over the objections of dissident creditors -- would raise borrowing costs for all home buyers and jam courts with homeowners who would not otherwise declare bankruptcy.
Citigroup shares were up slightly to $7.16 on the news.
A rate cut for the record books
The Bank of England cut its key interest rate from 2% to 1.5%.It is a historic move: The rate has never been below 2% in the entire history of the central bank, founded in 1694.
Rates had been as high as 5% as recently as October. Stocks in the United Kingdom were litte changed by the move, had been expected. The FTSE 100 Index ($GB:UKX) closed off 2 points to 4,505.
Is Whole Foods a takeover target?
Los Angeles billionaire and supermarket mogul Ronald Burkle has gone shopping at Whole Foods Markets (WFMI, news, msgs), picking up 7% of the company's shares over the past two months, according to a Securities and Exchange Commission filing.Whole Foods shares jumped 22.6% to $12.27 on news of the investment by Burkle and his Yucaipa Cos. investment arm.
Whole Foods shares plunged 77% in 2008.
In the filing, Burkle said that he believed Whole Foods shares are undervalued and "that there are substantial opportunities for the company to improve operations and its pricing image while maintaining its high-quality product offering."
Whole Foods was the second-best S&P 500 performer after a 23.3% gain to $49.98 for Sears Holdings (SHLD, news, msgs). The company said it expects fourth-quarter profit to beat analysts' estimates and that it will end the fiscal year with some cash on hand and less inventory.
Costco, Target report drop in sales
Costco Wholesale (COST, news, msgs) this morning reported a 4% drop in same-store sales for December, bigger than the 3.7% drop analysts had expected.Same-store sales in its international division plunged 11%. The company blamed decreases in demand for nonfood items for the decline.
Discounter Target (TGT, news, msgs) reported a 4.1% drop in December same-store sales.
Stock Chart (Year)
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Wal-Mart it expects fourth-quarter earnings from continuing operations to be between 91 cents and 94 cents per share, below a previous forecast of between $1.03 and $1.07.
Analysts were looking for $1.06 per share.
Many consumers had flocked to discount stores amid the downturn for lower-priced goods, but even Wal-Mart is now showing that it is not immune to the recession.
This "does not bode well going into January-February, where we go into a lull period and there's really no reason to buy until spring," Adrienne Tennant, an analyst at Friedman, Billings, Ramsey, told Bloomberg Television this morning.
Retailers across the board were hammered in December.
Macy's (M, news, msgs) said it will close 11 underperforming stores in nine states, affecting 960 employees.
The department store chain also said same-store sales fell 4% in December. It expects to earn between 90 cents and $1 per share for the quarter ending Jan. 31, below the consensus estimate of $1.12.
Macy's fell 3.4% to $10.93.
- Top Stocks Blog: Macy’s turns out the lights
Mortgage rates continue to fall
Freddie Mac (FRE, news, msgs) this morning said that the benchmark 30-year fixed mortgage rate fell to an average of 5.01% for the week that ended today.That's the lowest rate since Freddie Mac started tracking the numbers in 1971.
"Interest rates for 30-year fixed-rate mortgages fell for the tenth week to a fourth consecutive record low due in part to the Federal Reserve's recent purchases of mortgage-backed securities issued by Freddie Mac, Fannie Mae (FNM, news, msgs) and Ginnie Mae," Frank Nothaft, Freddie Mac's chief economist, said in a statement.
The Fed plans to buy up to $500 billion of these securities by the end of June.
There were about $4.7 trillion of mortgage-backed securities available on Sept. 30.
Unemployment claims unexpectedly fall
Initial claims for unemployment benefits fell by 24,000 to 467,000 in the week that ended Sunday.While initial claims fell last week, they are up 42% from the same period last year. Continuing claims rose by 101,000 to 4.61 million in the week ending Dec. 27, the highest level since November 1982.
On Friday, the Labor Department will release the December jobs report. Economists expect a loss of 500,000 jobs last month, capping what could be the worst year of job losses since the end of World War II.
More from MSN Money
The Monster Employment Index, which measures how many jobs are proposed to candidates on the Web, dropped 131 points in December. It is down 22% from the previous year.
Wyeth in talks to acquire vaccine company
Drug maker Wyeth (WYE, news, msgs) may purchase Dutch biotech company Crucell (CRXL, news, msgs) in a deal that could be valued at $1.35 billion. The two companies confirmed that they are in talks late Wednesday.Shares of Crucell, which makes vaccines for hepatitis B and influenza, rose 12.2% to $23; Wyeth shares rose 0.4% to $38.33.
Microsoft wins Verizon deal
Microsoft (MSFT, news, msgs) shares were up 3.1% to $20.12 today, the second-best Dow performer, after winning an Internet search deal with Verizon (VZ, news, msgs).Microsoft CEO Steve Ballmer announced the deal to make Microsoft the default Internet search provider for Verizon Wireless subscribers Wednesday night at the Consumer Electronics Show in Las Vegas. (Microsoft is the publisher of MSN Money.)
"I'm sure Microsoft is giving these companies good deals to get carriage, but that's not necessarily a bad thing," David Card, an analyst at Forrester Research, told Bloomberg News. "People will use what's on the screen to do the searches. So that's important for Microsoft even if they do wind up overpaying a little."
Verizon was up 1.5% to $32.39.
EMC to cut jobs
It sounds like a broken record: another company cutting jobs.This time, EMC (EMC, news, msgs) late Wednesday announced plans to eliminate 2,400 positions, or 7%, of its work force. The company, which makes external disk storage devices, said the layoffs would help reduce expenses by $350 million this year.
The company also said its CEO and other top executives will take pay cuts in 2009 and suspended salary increases for its other employees.
EMC said it expects to earn between 23 cents and 24 cents per share on an adjusted basis for the most recent quarter; the consensus estimate is for 23 cents per share.
The stock was up 6.4% to $11.89.
| Thur. | Wed. | Chg. | Month chg. | YTD chg. | |
|---|---|---|---|---|---|
| Treasurys | |||||
| 13-week Treasury bill | 0.080% | 0.100% | -0.020 | -30.43% | -30.43% |
| 5-year Treasury note yield | 1.598% | 1.661% | -0.063 | 3.03% | 3.03% |
| 10-year Treasury note yield | 2.445% | 2.494% | -0.049 | 8.96% | 8.96% |
| 30-year Treasury bond yield | 3.045% | 3.066% | -0.021 | 13.15% | 13.15% |
| Currencies | |||||
| U.S. Dollar Index | 82.335 | 83.115 | -0.780 | 0.23% | 0.23% |
| British pound in dollars | $1.5232 | $1.5117 | 0.0115 | 3.38% | 3.38% |
| Dollar in British pounds | £0.6565 | £0.6615 | -0.0050 | -3.27% | -3.27% |
| Euro in dollars | $1.3712 | $1.3663 | 0.0049 | -2.13% | -2.13% |
| Dollar in euros | € 0.7293 | € 0.7319 | -0.0026 | 2.17% | 2.17% |
| Dollar in yen | 91.14 | 92.56 | -1.42 | 0.54% | 0.54% |
| Canadian dollar in U.S. dollars | $0.848 | $0.838 | $0.0094 | 3.66% | 3.66% |
| U.S. dollar in Canadian dollars | $1.180 | $1.193 | -$0.0123 | -3.53% | -3.53% |
| Commodities | |||||
| Gold | $854.50 | $841.70 | $12.80 | -3.37% | -3.37% |
| Copper | $1.4790 | $1.5115 | -$0.03 | 4.89% | 4.89% |
| Silver | $11.0970 | $11.1050 | -$0.01 | -1.75% | -1.75% |
| Corn | $4.0675 | $4.1650 | -$0.10 | -0.06% | -0.06% |
| Crude oil (NYMEX) (per barrel) | $41.70 | $42.63 | -$0.93 | -6.50% | -6.50% |
Andrew Rosenbaum contributed to this report.
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