An alarming employment report on Thursday set the stage for another drop in stock prices.
The Dow Jones Industrial Average fell 28.57 points to 12,542.38, the sixth decline in the past seven sessions. The Nasdaq Composite Index was down 9.87 points to 2,836.94, and the S&P 500 lost 2.16 points to 1,353.33.
The Department of Labor reported initial claims for jobless benefits rose by 78,000 in the week ended Nov. 10 to 439,000, the biggest increase in 18 months. The increase was directly related to workers who lost their jobs as a result of Hurricane Sandy and became eligible for unemployment benefits.
Gold fell $16.30 to $1,713.80 an ounce, and oil fell 87 cents to $85.45 a barrel.
Wal-Mart Stores Inc. (NYSE: WMT) slid 3.6 percent as the world’s largest retailer forecast earnings that missed estimates.
Viacom Inc. (NYSE: VIAB) increased 2.6 percent after the media company’s earnings topped analyst estimates.
“Wal-Mart is probably the best economic indicator today,” said Richard Sichel, who oversees about $1.8 billion as chief investment officer at Philadelphia Trust Co. “We have the daily drumbeat from Washington with investors watching, waiting and hoping that something will be resolved on the budget and enough progress will be made to take us to the end of the year without too much volatility.”
Equities fell as Israeli Defense Minister Ehud Barak signaled that Israel is ready to escalate its military operations against Gaza after at least one long-range missile was fired at Tel Aviv by Palestinian militants. Israel on Wednesday began a military operation termed Pillar of Defense against militants in the Gaza Strip.
“The economic reports were a mixed bag, but the market probably doesn’t care about that at the moment,” said James Gaul, a portfolio manager at Boston Advisors LLC, which oversees about $2.3 billion in assets. “We had a steep decline since October, and the question is whether we can stabilize here around the 1,350 to 1,358 level. If that happens then we may have a snap-back rally.”
Twelve members in the S&P 500 released earnings Thursday. Of companies to have reported third-quarter results so far, 71 percent exceeded analyst profit estimates, while 59 percent missed sales forecasts, according to data compiled by Bloomberg.
Wal-Mart dropped 3.6 percent to $68.72. Chief Executive Officer Mike Duke has been reducing prices to lure U.S. shoppers who are still suffering amid sluggish economic growth and 7.9 percent unemployment. Discount chains such as Dollar General Corp. and Dollar Tree Inc. (Nasdaq: DLTR) have attracted some of those customers with smaller-format stores that allow for quicker trips and by adding food items.
Target Corp. (NYSE: TGT) gained 1.7 percent to $62.44. The second-largest U.S. discount retailer said third-quarter profit increased 15 percent as its branded credit cards boosted store sales.
Dollar Tree rose 5.1 percent to $39.70. The company, which sells everything from toys to pet food and cleaning supplies for $1 or less, reported third-quarter earnings that beat analyst estimates and forecast full-year profit of as much as $2.70 a share, more than the average projection of $2.48 in a Bloomberg survey.
Viacom increased 2.6 percent to $49.23. The media company that owns the Paramount film studio and cable networks such as Nickelodeon and MTV topped analysts’ profit estimates after cutting expenses and getting more money from pay-TV providers.
NetApp (Nasdaq: NTAP) jumped 11 percent to $30.20 after the maker of data-storage products reported second-quarter earnings excluding some items of 51 cents a share. That topped analysts’ average projection of 48 cents, according to Bloomberg data.
Cisco Systems Inc. (Nasdaq: CSCO) rose 1.6 percent to $17.94 for the second day of gains. The biggest maker of computer networking equipment rallied 4.8 percent Wednesday after its profit topped analysts’ estimates.
Bank of America Corp. (NYSE: BAC) added 1.1 percent to $9.09. The bank will generate $46.8 billion of extra capital over the next three years that it can spend on dividends and stock buybacks, according to analysts at International Strategy & Investment Group LLC.