By Mark Cotton, MarketWatch
Jan 5, 2006
U.S. stocks edged higher Thursday, helped by a drop in jobless claims to a
five-year low, but a cautious profit forecast from Wal-Mart and broker
downgrades for Boeing and Merck were capping gains on the Dow Jones Industrial
Average.
The Dow Jones Industrial Average was last up 3 points at 10,883.
The Nasdaq Composite Index rose 6.5 points to 2,269.
The S&P 500 Index climbed nearly 2 points to 1,275 , extending a 4 1/2-
year high for the broad gauge. The major indexes have posted gains for the
last two sessions.
On the currency markets, the euro slipped against the dollar after two
days in which it made steady inroads against the greenback. The euro was down
0.2% at $1.2088. Against the Japanese yen, the dollar was down 0.1% at 116.15.
Gold futures fell in early trading. Gold for February delivery was off
$7.70 at $527.90 an ounce.
On the bond market, long-term Treasurys traded lower, sending yields
higher after the strong jobless data. The benchmark 10-year note was down 3/32
at 101 2/32, with its yield at 4.38%.
Crude futures were slightly lower ahead of data expected to show declining
weekly oil inventories. The benchmark February contract ended down 14 cents at
$63.28 in electronic trade. New York trading starts at 10 a.m. Eastern.
There was some good news on the economy. Weekly jobless claims tumbled to
a five-year low. The number of people filing for U.S. state unemployment
benefits plunged by 35,000 to a seasonally adjusted 291,000 in the week ending
Dec. 31, the lowest since September 2000, the Labor Department said.
The market also gets a snapshot on the health of the nation's services
sector, with the release of the Institute for Supply Management's December
survey at 10 a.m. Eastern. The ISM index is expected to tick up to 58.9% from
58.5% in November, according to economists polled by MarketWatch. Any reading
over 50% indicates expansion in the sector.
Retailer in the spotlight
The retail sector was under scrutiny as investors attempted to gauge the
winners and losers of the 2005 holiday season, with the release of same-store
sales data, a key measure of performance for the nation's retailers. Same-
store data tracks sales from stores open at least a year.
Shares in Wal-Mart Stores dipped 15 cents at $46.17 after the world's
largest retailer said it expects fourth-quarter earnings to come in near the
low-end of its profit forecast. Its cautious outlook came as it reported a
2.2% rise in December same-store sales, in line with the outlook it gave over
the weekend.
Wal-Mart's arch-rival, Target Corp posted a healthier 4.7% rise in same-
store sales, and affirmed its full-year profit view. The stock was up 1.2% at
$55.32 in early trading.
Shares in International Business Machines fell 14 cents to $81.81 after
broker UBS lowered its forecast for the company's fourth-quarter services
bookings.
Brokers take down two Dow components
Shares in Boeing Co. fell 1.8% to $69.92 after Bank of America downgraded
the aerospace giant to neutral from buy. The broker says declining aircraft
orders in 2006, rising raw material prices and a risk of component shortages
will keep the company's stocks range bound.
Separately, Boeing announced it received 1,002 net commercial airplane
orders in 2005, a high for the aircraft manufacturer and above its previous
mark of 877 orders in 1988.
Merck, another Dow component, was also under pressure, slipping 31 cents
to $32.82, after Goldman Sachs cut its rating on the pharmaceutical group to
underperform from in-line, citing valuation.
On the merger and acquisition front, the Blackstone Group and Hewlett-
Packard Co. are considering jointly buying Computer Sciences Corp., the Wall
Street Journal reported, citing anonymous sources. Computer Sciences already
held talks with a consortium that included Lockheed Martin, Blackstone and
other private equity groups, with a view to buying it out, but those talks
fell through.
Elsewhere, shares of Rambus Inc. soared 19% to $22.03 after it won the
right to pursue its patent dispute with Hynix Semiconductor.
This MarketWatch news update is provided to you courtesy of Thomson
Financial.
This is Thomson Financial's Market Commentary, which is issued three times
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The information herein is believed to be true and accurate. We take no
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SOURCE Thomson Financial Corporate Group
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