Investors moved the sidelines Thursday. Prices were modestly lower as traders focused on renewed concerns over the conflict in Iran and mixed reports on retail sales.
The Dow Jones industrial average fell 29.24 points to 12,637.63. The Nasdaq composite index dropped 1.83 points to 2,488.67.
The Labor Department reported that initial claims for jobless benefits rose in the past week by 3,000 to 311,000.
Oil prices continued to seesaw Thursday. Crude closed up $2.00 to $59.71 a barrel, the highest level so far in 2007. Prices had been lower in early trading but moved higher after officials in Iran said they would respond quickly to any military action by the United States. The continuing freeze across much of the country also pushed up demand for heating oil.
A weak forecast from Toll Brothers Inc. (NYSE: TOL), the nation's largest builder of luxury homes, pressured housing stocks and rekindled concerns about whether the slumping housing market would hurt the economy. And HSBC Holdings PLC (NYSE: HBC), the European bank, announced an increase in its provisions for soured mortgage loans, which hurt shares of U.S. banks.
Investors were hoping for news or data that would send stocks higher after days of largely meandering trading, but they didn't find it in generally decent retail sales reports. Wal-Mart Stores Inc., the world's largest retailer, topped Wall Street's forecast though the month's increase was modest.
"I don't think there is any one thing to point to as a catalyst but just the aggregation of a couple of small things," Jack Caffrey, equity strategist for JPMorgan Private Bank, said of the day's trading. "I think there is a growing recognition that we have come so far with a stutter or a stumble."
"There's certainly not a sense of panic and I think people still have an interest in buying if they can get an attractive entry point."
Energy traders rushed back into the market amid frigid temperatures in the U.S. and after Occidental Petroleum Corp. (NYSE: OXY) shut a field in California following a fire. Light, sweet crude settled up $2 at $59.71 per barrel, its highest price this year on the New York Mercantile Exchange.
The market seemed little moved by the Commerce Department's report that wholesale inventories fell 0.5 percent to a seasonally adjusted $393.76 billion. Analysts expected an increase of 0.5 percent.
In Europe, both the Bank of England and the European bank left interest rates unchanged, mirroring a decision by the U.S. Federal Reserve last week to stand pat on rates. The European bank hinted, however, that a rate hike might be in the offing.
Worries about the housing market started with HSBC, which said it was seeing an increase in delinquencies in the U.S. subprime lending market.
HSBC, which is traded in American Depositary Receipts on the New York Stock Exchange, fell $2.44 to $89.78.
Citigroup Inc. (NYSE: C) fell 51 cents to $54.44, while JPMorgan Chase & Co. (NYSE: JPM) was off 28 cents at $50.93. Adding to concerns about mortgages, New Century Financial Corp. (NYSE: NEW) fell $10.92, or 36.2 percent, to $19.24, a new 52-week low after the mortgage lender said it didn't properly account for some of the home loans it had to buy back.
Toll Brothers fell $1.04, or 3 percent, to $33.39 after saying its first-quarter home building revenue would fall by 19 percent. Hovnanian Enterprises Inc. (NYSE: HOV), another builder, was off $1.55, or 4.3 percent, at $34.74.
Walt Disney Co. (NYSE: DIS), which owns the ESPN and ABC television networks and its namesake theme parks, reported better-than-expected fiscal first-quarter earnings amid strong DVD sales for its "Pirates of the Caribbean" films. Disney slipped 19 cents to $35.29.
Electronic Data Systems Corp.'s (NYSE: EDS) fourth-quarter profit nearly doubled and contract signings, which help indicate how strong revenue will be in the future, rose sharply. The computer services company rose 84 cents, or 3.1 percent, to $27.92 after issuing a 2007 forecast that topped Wall Street's expectations.
The market was unimpressed despite a pickup in retail sales.
"A lot of consumers didn't do what people had hoped for in January," said Ryan Detrick, an analyst at Schaeffer's Investment Research in Cincinnati. "No one really missed a lot. There wasn't anyone that was really blowing up, but overall the market took it negatively," he said of the retailers.
"At the same time, the market has been going up and we're due for a sell."
Wal-Mart's (NYSE: WMT) January same-store sales, or sales at stores open at least a year, rose 2.2 percent. As it had for January, the company predicts same-store sales will rise 1 percent to 2 percent in February. Wal-Mart fell 27 cents to $48.31.
Sales at Federated Department Stores Inc. (NYSE: FD), parent of Macy's and Bloomingdale's, handily beat Wall Street's forecasts. January same-store sales increased 8.6 percent; Wall Street had been looking for a 4.6 percent rise. Federated rose $1.54, or 3.7 percent, to $42.86.
Clothing chain Gap Inc. (NYSE: GPS) rose 50 cents, or 2.6 percent, to $19.75 after its flat same-store sales were better than the decline analysts expected. The company also raised its fiscal 2006 profit forecast.
Declining issues outnumbered advancers by about 6 to 5 on the New York Stock Exchange, where consolidated volume came to 2.81 billion shares, compared with 2.62 billion Wednesday.
The Russell 2000 index of smaller companies rose 0.19, or 0.02 percent, to 816.39. The index passed 800 for the first time last week and set new closing and trading highs for the second straight day. The previous closing and trading high was 816.20.
Overseas, Japan's Nikkei stock average closed barely higher, showing a move of less than 0.01 percent. Britain's FTSE 100 ended down 0.36 percent, while Germany's DAX index was down 0.56 percent, and France's CAC-40 finished down 0.66 percent.
The Associated Press contributed to this report.
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