Dec. 15 /PRNewswire/ -- U.S. stocks closed slightly lower Thursday, after a
session made volatile by the early impact of Friday's options expirations,
although Altria rallied on a favorable tobacco verdict and Bear Stearns rose
on strong earnings.
The Dow Jones Industrial Average closed down just 1.84 point at 10,881.67.
The S&P 500 was off 1.80 points at 1,270.94 as the Nasdaq Composite lost 1.96
points to close at 2,260.63.
There were more than 1.6 billion shares traded on the New York Stock
Exchange, where declining shares outnumbered winners by 21 to 12. Over
1.78 billion shares traded in the Nasdaq market, with 18 falling stocks for
every 11 shares on the rise.
The market Thursday initially shot higher on positive data, including the
largest decline in U.S. consumer inflation since 1949, but the gains were not
sustained.
Todd Leone, head of listed trading at S.G. Cowen, said investors were
preoccupied with positioning themselves ahead of Friday's "quadruple witching"
simultaneous expirations of index futures, options on index futures, stock
options and individual stock futures. The expirations tend to create
volatility and exaggerate stock price movements.
Jim Awad of Awad Asset Management called Thursday's losses "mystifying" in
light of the strong data.
John Forelli, portfolio manager with Independence Investments, suggested that
the strong economic reports could have upset the stock market because they
strengthen the argument for more rate hikes. The Federal Reserve this week
dropped hints that a halt to its policy of tightening monetary policy may be
drawing in sight.
The Labor Department reported that consumer prices plunged 0.6% on a retreat
in energy prices last month, marking the largest drop in 56 years.
Excluding volatile food and energy prices, the core consumer price index rose
0.2%.
In other positive economic news, the New York Fed said general business
conditions in its state in December rose to 28.7, the highest level of the
year, from 22.8 in November.
In addition, the Fed said industrial production rose 0.7% in November, and
capacity utilization rose to 80.2%. Economists had been expecting production
to rise 0.5% and capacity utilization to rise to 79.7%.
However, the most recent Philadelphia Federal Reserve's survey of
manufacturing was disappointing. The headline figure for December was
12.6, up from 11.5 in November, but below the MarketWatch forecast of
13.6.
Natural-gas futures were volatile after the Energy Department said gas in
storage fell by 202 billion cubic feet for the week ended Dec. 9. The front-
month futures contract closed down 89.8 cents at $13.781 per million British
thermal units.
Crude futures fell 86 cents to close at $59.99 a barrel.
The gold futures contract fell from recent peaks and closed at a two-week low,
down $2.90 at $506.60. On Monday, the contract touched a 25-year high of $543.
The dollar was mixed, following a rout earlier in the week after the Fed sent
strong signals it may stop lifting U.S. interest rates soon.
The dollar was off about 1.2% at 116.33 yen, as the euro fell 0.03% to
$1.1964.
Treasurys fell after the strong factory-sector readings offset the tame
inflation news in the minds of market participants. But the benchmark
10-year note last closed well off its lows, down 2/32 at 100-8/32 with a yield
of 4.470%.
Stocks on the march
Altria closed up 3.9% at $76.62 after the Illinois Supreme Court held that the
company had a right to market certain cigarettes as being "light" in nicotine.
Shares of Bear Stearns rose 5.4% to $116.50. The broker reported quarterly net
income of $407 million, or $2.90 a share, up from $352.6 million, or
$2.61 a share, a year before. Wall Street had expected earnings of $2.63 a
share.
However, Goldman Sachs dropped about 1% to $128.30. The company's fourth-
quarter net income rose 36% to $1.63 billion, or $3.35 a share, from $1.19
billion, or $2.36 a share. The results matched analyst's estimates as measured
by Thomson First Call.
Merck & Co., a Dow component, advanced almost 2% to $29.77 after announcing
new restructuring efforts that it calculates will yield $1 billion in savings.
Another Dow component, Microsoft finished about 21 cents lower at $26.90 after
the software maker raised its dividend by 12.5%.
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
Thomson Financial visit us on-line at http://www.thomsonfinancial.com. For
more financial information at your fingertips, please visit
http://www.irchannel.com.
SOURCE Thomson Financial Corporate Group
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