Stocks fall back on Wall Street a day after surge
NEW YORK (AP) -- Stocks edged lower Thursday morning, pulling back from record levels. The stock market surged Wednesday after the Federal Reserve said it was trimming its stimulus efforts, which investors saw as a vote of confidence in the economy.
KEEPING SCORE: The Standard & Poor's 500 index fell four points, or 0.2 percent, to 1,806, as of 10:54 a.m. Eastern time. The Dow Jones industrial average dropped 13 points, or 0.1 percent, to 16,154. The Nasdaq composite fell nine points, or 0.2 percent, to 4,061.
THE ECONOMY: The number of people seeking U.S. unemployment benefits rose 10,000 last week to 379,000, the highest since March. The increase may reflect volatility around the Thanksgiving holidays.
FED ACTION: Investors were happy to get more reassurance from the Fed Wednesday that interest rates would stay low after the stimulus was removed, said Eric Weigand, a senior portfolio manager at U.S. Bank.
The size of the reduction in bond purchases, from $85 billion to $75 billion a month, was also encouraging. "It was not too hot and not too cold," said Weigand.
TARGET TARGETED: Target fell $1.17, or 1.8 percent, to $62.38 after the company said that about 40 million credit and debit card accounts may have been compromised by a data breach that happened just as shoppers flooded into stores for Black Friday. Customers who used credit cards between Nov. 27 and Dec. 15 at the store may be exposed. The Secret Service is investigating.
ZUCKERBERG SALE: Facebook fell 89 cents, or 1.6 percent, to $54.69 after the company said it will sell 70 million shares, including more than 41 million held by founder and CEO Mark Zuckerberg. The social media's stock has surged since the summer, more than doubling since the end of July on optimism that the company's mobile strategy is working.
ORACLE'S EARNINGS: Business software company Oracle jumped $1.51, or 4.3 percent, $36.06 after it reported earnings that beat the forecasts of Wall Street analysts. The business software maker earned $2.55 billion, or 56 cents per share. Revenue rose 2 percent to $9.28 billion from $9.09 billion.
BONDS AND COMMODITIES: The yield on the 10-year Treasury note rose to 2.93 percent, from 2.89 percent on Wednesday. The price of gold dropped $37.30, or 3 percent, to $1,197.50 an ounce. Gold hasn't settled below $1,200 an ounce in more than three years. Interest rates are rising and the dollar is gaining after the Fed said it would pare back its bond purchases. Traders are selling gold because they see less risk of inflation from the Fed's stimulus program.
FADING POWER: The stocks of power companies fell the most of the 10 industry sectors that make up the S&P 500. Investors buy utility stocks because they pay big dividends. As bond yields rise, the stocks become less attractive.
GLOBAL MARKETS: In Europe, the FTSE 100 index of leading British shares rose 74 points, or 1.1 percent to 6,566 while Germany's DAX rose 124, or 1.4 percent to 9,284. A solid performance was recorded by Tokyo's Nikkei 225 index which closed up 1.7 percent to 15,859.