By Leslie Wines, MarketWatch
Dec 8, 2005
U.S. stocks were lower in early trade, as investors pondered market levels
after a nearly five-week rally, while McDonald's stock dropped on a sales
report that did not meet some analysts' predictions.
The Dow Jones Industrial Average was down 30 points at 10,780.
The S&P 500 and the Nasdaq Composite were down 2.37 points at 1,255.00 and
down 3.54 points at 2,248.47.
There were more than 242 million shares traded on the New York Stock
Exchange, where rising and falling shares were in roughly equal balance.
More than 333 million shares traded in the Nasdaq market, with 13
declining stocks for every 12 on the rise.
Investors were wary Thursday, following a lower close the day before.
However, there are a number of reasons that stocks should extend their
rally through year-end, according to Michael Metz, chief investment
strategist at Oppenheimer & Co.
"This is still a liquidity-driven market and the business and interest
rates outlooks are benign," Metz said.
And there are trillions of dollars under management at hedge funds - if
managers can't show gains by the end of the year, there will be no
paychecks for them," Metz said. "They are under considerable pressure."
"A mild mid-December slump often sets up a nice Santa Claus Rally," said
Marc Pado, U.S. market strategist at Cantor Fitzgerald.
The Labor Department reported that first-time filings for state
unemployment benefits rose 6,000 to 327,000 in the latest week, marking
the highest level since the week to Nov 19.
Economists polled by MarketWatch had expected the level of claims to drop
by 2,000.
Crude futures were on the rise, although the front-month contract remained
below the psychologically critical $60 a barrel level. The contract last
was up 29 cents at $59.50.
Treasury prices were higher, gaining back some of the losses they took on
Wednesday. The benchmark 10-year note last was up 7/32 at 100-2/32 with a
yield of 4.494%.
During the afternoon, the Treasury Department will auction off $8 billion
in new 10-year notes.
The dollar was under pressure, after the Bank of Japan and European
Central Bank officials making somewhat hawkish comments to reverse recent
gains for the greenback.
The dollar last was down 0.5% at 120.51 yen as the euro rose 0.08% to
$1.1796.
Gold futures continued to trade near their best levels in more than two
decades. The futures contract last was up $1.80 cents at $519.60.
Stocks on the march
McDonald's, a Dow component, was down 28 cents at $34.98. The fast-food
company said its global same-restaurant sales rose 4% in November, citing
its breakfast menu and extended hours. However, sales were flat in Europe.
Prudential Equity Research had expected McDonald's global same-restaurant
sales to rise 5% and its European sales to rise 2%.
Good news for a number of semiconductor companies failed to lift the chips
sector. The Philadelphia Exchange Semiconductor Index last was down 78 at
496.12.
Texas Instruments, the supplier of mobile phone chips, was down 4 cents at
$33.52 after Wednesday lifting the low end of its quarterly earnings
forecast range and narrowing its sales range outlook.
Intel shares fell 21 cents to $25.93 ahead of its late afternoon business
update.
Xilinx was off 4 cents at $26.41. Late Wednesday the designed of logic
chips lifted its sales guidance for its current quarter, citing
stronger-than-expected demand.
This MarketWatch news update is provided to you courtesy of Thomson
Financial.
This is Thomson Financial's Market Commentary, which is issued three times
daily; Pre-Open ( 9:00 a.m.), Post-Open (10:15 a.m.), and Close (5:00
p.m.). The information herein is believed to be true and accurate. We
take no responsibility for inaccurate information and reserve the right to
update our reports. If you have any questions please e-mail James Sang at
james.sang@tfn.com or call 646.822.6233. For more information about
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SOURCE Thomson Financial Corporate Group
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