Dow still headed for stellar January
New York - The Dow drifted lower Thursday, but stayed on track for its best start to the year in more than two decades.
The Dow Jones industrial average fell 26 points to 13,884 as of 11:18 a.m. (1618 GMT). The index has gained 6 percent so far this month, putting it in line for its best January performance since 1989, according to data from S&P Dow Jones Indices.
The Standard and Poor's 500 fell four points to 1,498, paring its advance for the month to 5.1 percent. The Nasdaq composite fell 2 points to 3 140.
Qualcomm Inc., a maker of chips for mobile devices, rose $3.14 to $66.68 after company said late on Wednesday that its net income surged in the final quarter of 2012, boosted by growing global demand for smartphones. Facebook fell $1.13 to $30.12 after reporting fourth-quarter earnings late Wednesday. Earnings were better than Wall Street's expectations, but the stock dropped as investors placed more significance on the company's growing expenses.
Stocks got a small boost after the Chicago Business Barometer for January came in at 55.6, a higher reading than analysts had forecast, according to data provider FactSet. Readings above 50 indicate that economic activity is expanding.
January's rally slowed yesterday after a report showed that the economy unexpectedly contracted in the fourth quarter of last year. Stocks have been rising after lawmakers reached a budget deal to prevent the U.S. from going over the “fiscal cliff,” and on optimism that the housing market is recovering and that firms are slowly starting to hire more workers.
The Dow has gained in the month of January three years in a row, and this year's performance is the best since the indexed surged 8.01 percent in 1989.
“The market is getting ahead of itself,” said T. Doug Dale, chief investment officer at Security Ballew Wealth Management. “If I'm looking at what the upside is from here, relative to the potential downside, I'd say it's unfavorable to the upside.”
More government reports Thursday also gave investors a better picture of the health of the economy.
The number of Americans seeking unemployment aid rose sharply last week but remained at a level consistent with moderate hiring. Weekly applications for unemployment benefits leapt 38,000 to a seasonally adjusted 368,000, the Labor Department said Thursday. The increase comes after applications plummeted in the previous two weeks to five-year lows.
U.S. consumers increased their spending in December at a slower pace, while their income grew by the largest amount in eight years, a report showed on Thursday. Consumer spending rose 0.2 percent last month, at a slightly slower than the 0.4 percent increase in November, the Commerce Department said.
The yield on the 10-year Treasury note, which moves inversely to its price was little changed at 1.99 percent.
Among other stocks making big moves:
- United Parcel Service Inc. fell $1.61 to $79.65 after is said that it was slowed down in the fourth quarter by weak global trade and a disappointing holiday-shopping season. The company is also forecasting 2013 results that are below analyst's expectations.
- JDS Uniphase added $2.29 to $14.69 after the technology company reported stronger-than-expected earnings on improved revenue and margins late Wednesday. - Sapa-AP