Wall Street struggled but ultimately closed Thursday slightly higher, as a bounce in technology stocks and sharply lower oil prices helped investors brush off concerns about sluggish consumer spending.
Retailers’ lackluster holiday sales reports initially sent major stock indexes significantly lower. Stocks climbed back after a drop in crude prices to below $56 a barrel raised hopes that cheaper gasoline might be on the way.
A broad advance from chip stocks supported the market. Leading the way was Intel Corp., which surged to its highest level in two weeks after Banc of America Securities said it expects fourth-quarter results will come in higher than expected.
The market’s performance Thursday showed that investors remain uneasy about any economic data, especially after minutes from the Federal Reserve’s last meeting indicated policymakers were in no hurry to cut interest rates. Mixed data on Thursday included disappointing housing and service-sector reports.
“People are thinking now that energy prices are coming down, and that gives a chance for technology and other sectors to perform better,” said Scott Fullman, director of investment strategy for Hapoalim Securities USA. “The broader picture is that the economy continues to show signs of slowing, and that will continue through the first quarter.”
The Dow Jones industrial average was up 6.17 points, or 0.05 percent, at the close of trading, having fallen by about 50 points earlier in the session. The broader Standard & Poor’s 500-stock index gained 1.74 points, or 0.12 percent, while the technology-rich Nasdaq composite index jumped 30.27 points, or 1.25 percent.
Bonds moved higher, with the yield on the benchmark 10-year Treasury note falling to 4.61 percent from 4.66 percent late Wednesday. Yields have moved decidedly lower during the past few week as it has became apparent there’s no impending interest rate cut from the Fed.
Also sending bond yields lower was the Institute of Supply Management’s services sector index for December, which showed growth slowed from November.
Other data released Thursday included the Commerce Department’s report that U.S. factory orders bounced back during November from a big drop. However, the rebound was still smaller than expected and driven partly by a sharp rise in demand for military aircraft.
Meanwhile, the Labor Department said the number of laid-off workers filing unemployment claims reached its highest level since late November. The National Association of Realtors’ pending home sales index for November — a measure of future demand for homes — slipped 0.5 percent to 107.0 from a revised 107.5 in October.
“What you’re seeing is just a tug of war between concerns the housing market is still weighing us down, and the wheelbarrows full of liquidity that want to go somewhere,” said Kevin Gaughan, portfolio manager and equity strategist at Strong Financial Corp.
But the drop in oil prices continued to be the biggest influence on the markets. Oil prices slid for a second day after the government reported inventories of gasoline, heating oil and diesel fuel rose more than analysts expected during the last week of 2006.
Exxon Mobil Corp. was among the biggest decliners on the Dow Jones industrials, falling $1.39 to $72.72. Chevron Corp. fell 69 cents to $70.28, and British Petroleum PLC dropped 87 cents to $65.11.
However, lower gasoline prices were seen as a positive for retailers, many of which suffered during the holiday season, and some of whom issued profit warnings Thursday.
Gap Inc. warned that fourth-quarter results will come in below expectations, and its shares rose 13 cents to $19.44. Target Corp., the nation’s second-largest discount retailer, rose 41 cents to $57.59 despite missing sales estimates.
Federated Department Stores Inc. fell 20 cents to $37.31. Limited Brands Inc. was one of the few decliners in the sector after it reported lower store traffic caused its same-store sales to miss expectations. Shares fell $2.23, or 7.5 percent, to $27.35.
Intel, the second biggest advancer in the S&P 500, rose 82 cents, or 4 percent, to $21.17. Banc of America Securities raised the company’s fourth-quarter earnings estimate, saying the chip maker will likely gain market share. Rival Advanced Micro Devices Inc. rose 27 cents to $19.79.
Overseas, Japan’s Nikkei stock average closed up 0.74 percent. Britain’s FTSE 100 was down 0.51 percent, Germany’s DAX index gave up 0.25 percent and France’s CAC-40 lost 0.65 percent.