Stocks extended their losses into a second day Thursday after a cautious outlook from home builder Toll Brothers and a surge in energy prices...
NEW YORK — Stocks extended their losses into a second day Thursday after a cautious outlook from home builder Toll Brothers and a surge in energy prices rattled investors.
The Dow Jones industrial average fell 55.79 to 10,755.12.
Microsoft, one of the 30 Dow stocks, slipped 6 cents to $27.69 a share.
Boeing, also a Dow stock, bucked the trend, gaining 42 cents to $70.07, a five year high.
Broader stock indicators were also lower. The Standard & Poor’s 500 index fell 1.53 to 1,255.84, and the Nasdaq composite index fell 5.55 to 2,246.46.
Without much news to guide the market, Wall Street drifted this week after a November rally that vaulted stocks to four-year highs. Recent signs that the economy is faring better than expected renewed fears about inflation and rising interest rates, although some traders still anticipate a final run-up in stocks by year-end.
“The dynamics of [this week’s] decline have been orderly and nothing to be concerned with,” said Steven Goldman, chief market strategist at Weeden. “The market … cleansed some of its excesses on that pullback.”
Goldman said the main concern on Wall Street continues to be whether the Federal Reserve will extend its string of rate increases now that the economy appears to be doing well. Higher rates could lead to a consumer slowdown as lending costs increase, he said.
Colder weather in the Northeast and Midwest drove expectations for greater heating-fuel demand, although weekly inventory reports have indicated that U.S. oil and gas reserves continue to expand. On the New York Mercantile Exchange, natural gas surged $1.29 to $14.99 per 1,000 cubic feet, as a barrel of light crude jumped $1.45 to $60.66.
The sole economic report of the day came from the Labor Department, which said unemployment claims grew by 6,000 to 327,000 last week, although 8,000 of those were hurricane-related. Economists were expecting claims to drop to 318,000.
General Motors paced the Dow’s decline, falling $1.04 to $22. The troubled automaker, which plans to cut 30,000 jobs and shut 12 plants by 2008, on Wednesday said it is in talks to appoint billionaire Kirk Kerkorian as a company director, a move analysts say could lead to drastic restructuring actions.
Toll Brothers posted a 72 percent jump in fourth-quarter profit as revenue climbed 40 percent. But investors remained optimistic about the stock itself although the home builder gave a disappointing forecast for next year and said it was unsure about 2007 earnings. Toll Brothers gained $1.25 to $35.55.
Fast-food chain McDonald’s said its worldwide same-store sales grew 4 percent last month, with sales up 4.8 percent at U.S. locations. Its results, however, came in below analysts’ estimates, sending McDonald’s down 44 cents to $34.82.