updated 2/9/2007 8:01:48 AM ET 2007-02-09T13:01:48

Wall Street pulled back Thursday after investors were largely unimpressed by retail sales figures and strong profit reports from Walt Disney Co. and Electronic Data Systems Corp. Weakness in housing stocks also weighed on the market.

Major Market Indices

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 decent retail sales reports . Wal-Mart Stores Inc., the world’s largest retailer, topped Wall Street’s forecast though the month’s increase was modest.

“A lot of consumers didn’t do what people had hoped for in January,” said Ryan Detrick, an analyst at Schaeffer’s Investment Research in Cincinnati. “No one really missed a lot. There wasn’t anyone that was really blowing up, but overall the market took it negatively,” he said of the retailers. “At the same time, the market has been going up and we’re due for a sell.”

A weak forecast from Toll Brothers Inc., the nation’s largest builder of luxury homes, pressured housing stocks and rekindled concerns about whether the slumping housing market would hurt the economy.

The Dow Jones industrial average finished the day down 29.24 points, or 0.23 percent, while the broader Standard & Poor’s 500-stock index was off 1.71 points, or 0.12 percent, and the Nasdaq composite index gave up 1.83 points, or 0.07 percent.

Bond prices rose as stocks retreated. The yield on the benchmark 10-year Treasury note fell to 4.73 percent from 4.74 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices rose.

Energy traders rushed back into the market amid frigid temperatures in the U.S. and after Occidental Petroleum Corp. shut a field in California following a fire. Light, sweet crude settled up $2 at $59.71 per barrel, its highest price this year on the New York Mercantile Exchange.

The market seemed little moved by the Commerce Department’s report that wholesale inventories fell 0.5 percent to a seasonally adjusted $393.76 billion. Analysts expected an increase of 0.5 percent.

Similarly, investors appeared unfazed by a slight uptick in the number of newly laid off workers seeking unemployment benefits; the report 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.

In Europe, both the Bank of England and the European 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.

Also out of Europe, a warning by HSBC Holdings PLC about an increase in its provisions for soured loans hurt shares of U.S. banks. Investors grew concerned, for example, that homeowners could default on mortgages, Detrick said. Citigroup Inc. fell 57 cents to $54.37, while JPMorgan Chase & Co. was off 49 cents at $50.72.

Jack Caffrey, equity strategist for JPMorgan Private Bank, contends the pullback reflects concerns ranging from housing to the mortgage loans to retail sales reports.

“I don’t think there is any one thing to point to as a catalyst but just the aggregation of a couple of small things,” he said. “I think there is a growing recognition that we have come so far with a stutter or a stumble.”

“There’s certainly not a sense of panic and I think people still have an interest in buying if they can get an attractive entry point.”

In corporate news, Toll Brothers fell $1.04, or 3 percent, to $33.39 after saying its first-quarter home building revenue would fall by 19 percent. Hovnanian Enterprises Inc., another builder, was off $1.55, or 4.3 percent, at $34.74.

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 slipped 19 cents to $35.29.

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 84 cents, or 3.1 percent, to $27.92 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 predicts same-store sales will rise 1 percent to 2 percent in February. Wal-Mart fell 27 cents to $48.31.

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 $1.54, or 3.7 percent, to $42.86.

Clothing chain Gap Inc. rose 50 cents, or 2.6 percent, to $19.75 after its flat same-store sales were better than the decline analysts expected. The company also raised its fiscal 2006 profit forecast.

Overseas, Japan’s Nikkei stock average closed barely higher, showing a move of less than 0.01 percent. Britain’s FTSE 100 ended down 0.36 percent, while Germany’s DAX index fell 0.56 percent and France’s CAC-40 finished down 0.66 percent.

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