September 22, 2020

Stocks and Bonds: Markets Turn Lower, and Oil Prices Rise Again

The Commerce Department, in its weekly report on the job market, said that 382,000 people applied for initial unemployment benefits last week, a bigger decline than estimated and down from the previous week’s 388,000. Economists say that the numbers suggested that layoffs were slowing, with Goldman Sachs economists saying that there was overall improvement in the job sector.

In addition, the nation’s major retailers reported sales for March that were up 1.7 percent, better than the marginal decline that had been expected.

Shares that had edged higher on that news in early trading declined shortly before noon on reports of the earthquake in Japan. “Right now this is going to be the dominant driver of markets, and it will have a broad impact,” Lawrence R. Creatura, a portfolio manager at Federated Investors, said of the earthquake.

The Dow Jones industrial average, which was down almost 100 points at one time, closed 17.26 points, or 0.14 percent, lower at 12,409.49. The broader Standard Poor’s 500-stock index lost 2.03 points, or 0.15 percent at 1,333.51, while the Nasdaq composite index declined 3.68 points, or 0.13 percent, at 2,796.14.

European indexes also turned lower after the quake. The DAX in Frankfurt ended 0.50 percent lower, and the CAC-40 in Paris lost 0.49 percent. The FTSE 100 in London fell 0.56 percent.

In the oil markets, crude prices rose $1.47 to close at $110.30 amid the continued turmoil in North Africa and the Middle East and a report that supply growth was slowing at a time that demand was increasing.

An analysis by the International Monetary Fund, which was released as part of its World Economic Outlook, said that oil demand in developing countries was rapidly catching up with that of developed countries at a time when production constraints were beginning to restrain major oil exporters.

In addition, “Japan has spooked the market with the idea that Japan may need more oil to replace the lost nuclear generation,” Brian M. Youngberg, an energy analyst for Edward Jones, said.

Wall Street was able to brush off other developments from abroad. As expected, the European Central Bank raised interest rates and Portugal requested a bailout.

“From the E.C.B. perspective, Trichet really did not rock the boat,” said Nick Kalivas, an analyst at MF Global, said, referring to the central bank president, Jean-Claude Trichet. “I think that is creating some stability in the market. I would not call it a bullish factor, but it is not bearish. He did not come out and pound the table.”

Richard Ross, the global technical strategist at Auerbach Grayson Company, noted that the S. P. has rallied more than 6 percent since the earthquake and tsunami in Japan on March 11.

“What is interesting is the markets are holding up extremely well,” he said, despite global events and the rising crude prices.

“All of those factors are telling you people are willing to look past the headlines for the time being,” Mr. Ross said. “There is an undercurrent of demand.”

Consumer staples and information technology shares also rose marginally.

The equipment maker, Caterpillar, declined more than 1 percent on the Dow, closing at $109.85.

Chesapeake Energy was up 2.4 percent at $34.49.

Retail stocks inched up after the March sales report. The discount warehouse Costco was nearly 4 percent higher at $77.82, and the apparel store Nordstrom was up 1.55 percent at $46.61, while Macy’s climbed 1.11 percent to $25.47. Bed, Bath Beyond rose 10.45 percent to $54.55.

The industrial conglomerate Ingersoll-Rand was up 1.25 percent to $48.42 after it raised its quarterly dividend by 71 percent, and announced a $2 billion share buyback program.

As bond prices declined, the yield on the 10-year Treasury climbed to 3.57 percent from 3.55 percent late Wednesday.

Article source: http://feeds.nytimes.com/click.phdo?i=02b31bd0922b7f3bda13f657c3beb930

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