Stocks fell in early trading Thursday as investors were largely unimpressed by upbeat retail sales reports and by strong profit reports from Walt Disney Co. and Electronic Data Systems Corp.
Investors appeared to be looking for a major catalyst to send stocks higher after days of largely meandering trading, but they didn't find it in generally good retail sales. Wal-Mart Stores Inc., the world's largest retailer, topped Wall Street's forecast though the month's increase was modest.
In economic news, the number of newly laid off workers seeking unemployment benefits rose slightly last week though the figures indicated the job market remains solid. The Labor Department said 311,000 newly laid off workers sought benefits last week, an increase of 3,000 from the prior week. A Commerce Department report on wholesale inventories is also due Thursday.
In Europe, the Bank of England and the European Central Bank left interest rates unchanged, mirroring a decision by the U.S. Federal Reserve last week to stand pat on rates. The European bank hinted, however, that a rate hike might be in the offing.
In the first hour of trading, the Dow industrials fell 33.49, or 0.26 percent, to 12,633.38.
Broader stock indicators also moved lower. The Standard & Poor's 500 index was down 4.74, or 0.33 percent, at 1,445.28, and the Nasdaq composite index was down 10.26, or 0.41 percent, at 2,480.24.
Bonds fell following the comments from the European bank, which raised concerns of a rate hike in the United States. The yield on the benchmark 10-year Treasury note rose to 4.75 percent from 4.74 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude rose 20 cents to $57.91 in premarket electronic trading on the New York Mercantile Exchange.
In corporate news, Disney, which owns the ESPN and ABC television networks and its namesake theme parks, reported better-than-expected fiscal first-quarter earnings amid strong DVD sales for its "Pirates of the Caribbean" films. Disney rose 50 cents to $35.98.
Electronic Data Systems' fourth-quarter profit nearly doubled and contract signings, which help indicate how strong revenue will be in the future, rose sharply. The computer services company rose 53 cents to $27.61 after issuing a 2007 forecast that topped Wall Street's expectations.
Wal-Mart's January same-store sales, or sales at stores open at least a year, rose 2.2 percent. As it had for January, the company is predicting same-store sales will rise 1 percent to 2 percent in February. Wal-Mart was off 13 cents at $48.45, reports AP.
Sales at Federated Department Stores Inc., parent of Macy's and Bloomingdale's, handily beat Wall Street's forecasts. January same-store sales increased 8.6 percent; Wall Street had been looking for a 4.6 percent rise. Federated rose $1.70, or 4.1 percent, to $43.04.
Clothing chain Gap Inc. rose 56 cents, or 2.9 percent, to $19.81 after its flat same-store sales were better than the decline analysts expected. The company also raised its fiscal 2006 profit forecast.
The Russell 2000 index of smaller companies was down 3.12, or 0.39 percent, at 813.04.
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