Markets flat amid retail sales worry
NEW YORK » Stocks finished largely flat yesterday as investors returned from the Christmas holiday to news of weaker-than-expected retail sales. A jump in oil prices also concerned investors.
The International Council of Shopping Centers said its index of retail chain store sales rose 2.8 percent last week, rounding out a sluggish December performance that puts merchants on track for a smaller sales gain than the trade group originally expected. Still, there is some hope sales will rebound as shoppers start spending with holiday gift cards.
Other reports released alongside Christmas proved disappointing. Target Corp. indicated its sales may have fallen in December, while MasterCard Inc. said holiday spending -- including credit, cash and checks -- climbed a modest 3.6 percent between Thanksgiving and Christmas, weighed by a slowdown in sales of women's apparel. That compares with a rise of 6.6 percent over the same period last year. The 2007 holiday figure is at the low end of its 3.5 percent to 4.5 percent range. Excluding gasoline and auto sales, that figure was 2.4 percent.
The news could raise concerns about the strength of consumer spending and, in turn, the economy. However, it has been widely expected that holiday sales would be slower than in years past.
A report that U.S. home prices fell for the 10th consecutive month in October also appeared to weigh on investors.
Kim Caughey, senior equity analyst at Fort Pitt Capital Group in Pittsburgh, said reports on retail had upended some investors' hopes for strong consumer spending in the long weekend before Christmas.
"I think investors had held out hope that retail might have had that final flourish," she said. "It was a sad flourish, not a strong one."
The Dow Jones industrial average rose 2.36, or 0.02 percent, to 13,551.69.
Advancing and declining issues were just about even on the New York Stock Exchange and volume came to a light 838.7 million shares. The Standard & Poor's 500 index rose 1.21, or 0.08 percent, to 1,497.66, and the Nasdaq composite index rose 10.91, or 0.40 percent, to 2,724.41.
The Russell 2000 index of smaller companies rose 2.64, or 0.33 percent, to 797.03.
The yield on the 10-year Treasury note, which moves opposite its price, rose to 4.29 percent from 4.21 percent late Tuesday.
The dollar was mixed against other major currencies, while gold prices rose.
A barrel of light, sweet crude rose $1.84 to settle at $95.97 on the New York Mercantile Exchange. Oil rose to a one-month high of $96.54 during the session.
Among chain stores, Target fell $1.31, or 2.5 percent, to $51.16 after the nation's No. 2 retailer said same-store sales -- those from stores open at least a year -- would range from a 1 percent increase to a 1 percent decrease for the five weeks through Jan. 5. Earlier expectations had called for a gain of 3 percent to 5 percent.
Macy's Inc., parent of its namesake chain as well as Bloomingdale's, declined $1.06, or 3.9 percent, to $25.95 after falling to a three-year low of $25.25 earlier in the session.