Stocks Slip In Early Trade; Jobs Report Is Weak

By Salon Staff

Published January 12, 2012 3:36PM (EST)

NEW YORK (AP) — Stocks slipped in early trading Thursday after an increase in unemployment claims countered optimism about strong bond auctions in Italy and Spain.

The Dow Jones industrial average is off 40 points at 12,410 just after 10 a.m.

The S&P 500 index is down 4 points at 1,288. Energy and banking stocks led the market lower. The Nasdaq composite fell 9 points to 2,700.

Weekly unemployment benefits spiked last week, mostly because companies let go of thousands of holiday hires. Also, retail sales barely rose in December and were lower than analysts were expecting.

Chevron Corp. led the Dow average lower with a 2 percent decline. The world's second-largest publicly traded oil company said late Wednesday that its fourth-quarter income will be "significantly" below its results in the prior quarter because of narrower profit margins on refining and selling fuels. Refinery volumes fell both in the U.S. and overseas.

European markets mostly rose after Italy and Spain held highly successful bond auctions, easing worries about Europe's debt crisis. Italy's benchmark stock index rose 1.8 percent.

In Italy's first bond auction of the new year, the country was able to sell one-year bonds at a rate of just 2.735 percent, less than half the 5.95 percent rate it had to pay last month. That's a signal that investors are becoming more confident in Italy's ability to pay its debts.

Spain was able to raise double the amount of money it had sought to raise in its own bond sale as demand for its debt was strong. Both auctions were seen as important tests of investor sentiment.

Investors have been worried that Italy and Spain, the third- and fourth-largest countries in the euro area, might get dragged into the region's debt crisis. Greece, Ireland and Portugal have been forced to get relief from their lenders after their borrowing costs spiked to levels the countries could no longer afford.

The euro rose nearly a penny against the dollar, to $1.28, as worries eased about Europe's financial woes. The currency, which is shared by 17 European countries, fell to a 16-month low against the dollar the day before.

Meanwhile, the two leading European central banks held their interest rates Thursday, with the European Central Bank keeping its rate at 1 percent and the Bank of England maintaining its lending rate at a record low of 0.5 percent.

Among other stocks making big moves:

— Casino operator Wynn Resorts Ltd. fell 5 percent, the biggest drop in the S&P 500 index. The company disclosed in a regulatory filing that its vice chairman has filed a lawsuit against the company. Vice Chairman Kazuo Okada claims that Wynn has refused to give him access to records relating to a $135 million donation the company made to the University of Macau and other matters.

— Home goods seller Williams-Sonoma Inc. dropped 2 percent after it said its fiscal fourth-quarter earnings guidance to a level below what analysts had expected because of holiday-season promotions.

Salon Staff

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