By ,
Published January 13, 2015
Stocks pared their gains and tech shares retreated into negative territory Thursday as investors locked in profits after sending the market sharply higher on hopes that interest-rate cuts by the European Central Bank may spur a recovery in global growth.
The blue-chip Dow Jones industrial average gained 33.15 points, or 0.35 percent, to end the session at 9,587.52. The technology-packed Nasdaq Composite Index fell 9.76 points, or 0.53 percent, to 1,827.77 after giving back a gain of 51 points, or nearly 2.8 percent. The broader Standard & Poor's 500 Index edged up 2.74 points, or 0.25 percent, at 1,118.54.
At the Dow's high of the day -- up almost 170 points -- the blue-chip index had erased all of the steep loss it made after the Sept. 11 attacks on the Pentagon and World Trade Center sent the market tumbling. The Nasdaq and S&P 500 already have clawed back their post-attack losses as investors looked past the bleak economic environment and bet on a comeback.
"Any time you get a strong run up, you've got to expect a little bit of a pullback," said Arnie Owen, a trader at Roth Capital Partners in Newport Beach, California. "The underlying tone of the market still feels really good."
The European Central Bank and the Bank of England both lowered rates by half a percentage point -- an even bigger cut than many traders had expected. The reductions came on the heels of a half-point cut by the Federal Reserve on Tuesday.
The retreat in stocks coincided with the release of minutes of the Federal Reserve's Oct. 2 policy meeting. The proceedings revealed committee's members believed Sept. 11 attacks dealt a blow to an already struggling U.S. economy, but still thought a "relatively mild and short contraction" in economic activity, followed by a recovery next year, was the most likely outcome.
Investors got some encouragement about the economy from the latest jobless claims report, which showed the number of Americans applying for first-time unemployment benefits last week fell by 46,000 to 450,000 for the week ended Nov. 3. The government report also showed the number of workers remaining unemployed hit its highest level in more than 18 years.
All eyes are on the University of Michigan's closely watched monthly consumer sentiment survey, which is expected to show a decline in confidence in November, when it is released on Friday, after a surprise uptick last month.
Bookseller Barnes & Noble Inc. slumped $13.60 to $24.48 after it delivered a surprise warning of weak earnings as fears of more attacks against the public, including a Halloween hoax, spooked customers from going to malls and bookstores.
Energy firm Dynegy Inc. gained $3.50 to $36.50 while Enron Corp. was the most active on the New York Stock Exchange, falling 64 cents to $8.41.
Enron confirmed it is in talks with its hometown rival Dynegy over a possible business combination. Terms of any transaction have not been agreed on, the two companies said.
Enron said that it will restate its earnings from 1997 to 2000, and the first two quarters of 2001 in response to Securities and Exchange Commission and shareholders' questions.
Discount retailers rose on healthy same-store sales, those at stores open at least one year, for October. Discount department store Kohl's rose 37 cents to $61.31 on a 13.5 percent jump in same-store sales, while Wal-Mart gained 68 cents to $54.50 on a 6.7 percent increase.
Although the overall October sales performance was sluggish, these retailers' positive news was a relief to investors, who'd worried that consumer spending would slump further following the terrorist attacks. Consumer spending accounts for two-thirds of the nation's economy.
Among blue chips, Wall Street's advance was otherwise widespread as investors believe that many businesses stand to improve given the year's 10 interest rate cuts by the Fed. General Motors gained $1.01 to $43.75, American Express advanced 72 cents to $32.40 and 3M rose 95 cents to $111.40.
Tech stocks traded slightly lower as investors locked in profits from rallies in the Nasdaq, which had ended higher in the previous three sessions. Dell Computer slipped 11 cents to $26.14.
Advancing issues outnumbered decliners 8 to 7 on the New York Stock Exchange. Volume came to 1.48 billion shares, compared with the 1.42 billion shares traded Wednesday.
The Russell 2000 index, which tracks smaller company stocks, fell 1.74, or 0.4 percent, to 439.06.
Stocks rose sharply in Europe. France's CAC-40 gained 1.8 percent, Britain's FT-SE advanced 1.2 percent and Germany's DAX index climbed 2.7 percent.
Japan's Nikkei stock average finished up 1.4 percent.
Reuters and the Associated Press contributed to this report.
https://www.foxnews.com/story/stocks-pare-gains-on-profit-taking