Stocks awake to fiscal cliff hangover
By CNNMoney Staff
NEW YORK (CNNMoney) — The party is over on Wall Street. U.S. stocks were mixed Thursday, a day after logging big gains thanks to the passage of a fiscal cliff deal in Washington.
The Dow Jones industrial average, the S&P 500 and the Nasdaq bounced around the breakeven line.
Investors are taking a small step back as they consider the prospect of more wrangling over the U.S. budget in the weeks to come.
Bank stocks, which were among the biggest gainers on Wednesday, fell in early trading.
Bank of America and JPMorgan Chase were among the biggest losers on the Dow, while Goldman Sachs, Morgan Stanley and Wells Fargo were also lower.
Aside from keeping tabs on D.C. lawmakers, investors got a fresh look at the labor market, with the government’s weekly report on initial jobless claims and the monthly report on private sector jobs from payroll processor ADP.
The private sector added 215,000 jobs in December, according to ADP, while the government reported first-time jobless claims rose 10,000 to 372,000 in the latest week.
The two jobs reports serve as a prelude to the government’s closely watched monthly labor report, due Friday morning. Economists surveyed by Briefing.com expect job growth to have continued at a modest pace in December, with employers adding 150,000 jobs.
In November, employers added 146,000 jobs, and the unemployment rate fell to 7.7% as workers dropped out of the labor force.
Later Thursday afternoon, investors will mull over minutes from the Federal Reserve’s policy meeting in December. At that meeting, the Fed announced plans to expand its controversial stimulus program. The Fed also said it will keep accommodative policies in place until the unemployment rate falls to 6.5% or inflation exceeds 2.5% a year.
In corporate news, Family Dollar shares plunged after the discount retailer reported earnings that missed forecasts and issued a weak outlook.
Shares of Gap moved up slightly, after the retailer reported stronger-than-expected same store sales and announced a new $1 billion stock buyback.
Limited shares slid after the owner of Victoria’s Secret said same store sales fell short of forecasts.
Shares of spam maker Hormel rallied after the company announced it was paying $700 million to acquire the Skippy brand from Unilever.
Shares of SunPower spiked after Warren Buffett’s Berkshire Hathaway invested between $2 billion and $2.5 billion in two of the solar company’s projects.
European markets were mostly in the red after posting gains of 2% Wednesday, while Asian markets ended higher. Hong Kong’s Hang Seng advanced 0.4%, while the Australia ASX All Ordinaries index added 0.8%. Markets in Tokyo and Shanghai were closed for an extended New Year’s holiday.
The dollar rose against the euro and the British pound, but lost ground versus the Japanese yen.
Oil prices and gold prices edged lower.
The price on the 10-year Treasury fell, pushing the yield up to 1.86% from 1.84% late Wednesday.