Stocks struggled Thursday as investors juggled a weak holiday outlook from Wal-Mart and a drop in jobless claims. Techs clawed higher, with huge gains in JDS Uniphase and AMD.
The wavering was to be expected after the Dow logged its sixth straight gain Wednesday, boosting the blue-chip index more than 5 percent and to its highest level since October 2008.
The market's mood improved a bit after the Labor Department said jobless claims fell for the second week in a row to 502,000, suggesting continued gradual improvement in the economy.
Wal-Mart beat earnings expectations but delivered a light holiday forecast.
AIG shares rose amid speculation about its top executives.
Techs were out in front after an earnings beat from Applied Materials and big deal news.
Applied Materials hit it out of the park: It beat on both the top and bottom lines, announced plans to cut jobs globally and said it expects sales to jump 30 percentnext year.
Shares of AMD rocketed more than 20 percent after finally settling its patent war with Intel , which agreed to pay AMD $1.25 billion.
Giving the sector a jolt, Hewlett-Packard agreed to acquire 3Com for $2.7 billion in cash. The deal values 3Com at a 39 percent premium to its Wednesday close.
That shot started off a swirl of speculation about what rivals Cisco and IBM might do. Cisco, in fact, was the biggest decliner on the Dow this morning.
The big question is; What might be next takeover target in this tech horse race? JDS Uniphase and Broadcom are some of the names being tossed around.
JDS Uniphase rallied more than 10 percent. The company, if you recall, was one of the highflyers of the dot-com boom and crashed spectacularly. Now, it's at a sweet spot, says Sanford Bernstein’s Jeff Evenson, as it makes testing equipment that companies need for setting up broadband and wireless networks. They also make lasers and one of their biggest drivers last quarter was 3D glasses, capitalizing on the IMAX trend.
Brocade was actually downgraded by several analysts amid worries that it won't able to gain market share following the deal.
In addition to Wal-Mart, jitters over retail sales heading into the holidays also were reflected in earnings from Kohl's, which reflected Wal-Mart's in that the retailer beat third-quarter expectations but looks set to fall short in the year's final reporting period. Kohl's slipped 0.6 percent premarket.
Still to come: The government's monthly budget statement will be released at 2 pm New York time.
And the dollar could be active after more comments from Treasury Secretary Tim Geithner. Geithner told CNBC at the APEC meeting in Singapore that a strong dollar is important to global stability — reiterating the Treasury's strong-dollar policy.
- US Will Borrow Less as Banks Pay Back Funds: Geithner
He also said the US is likely to borrow less than first thought, with the government expecting significant repayments of public funds with interest.
In other early news, U.S. mortgage applications pushed higher last week.
The weekly report on oil inventories will be out at 11 am New York time, delayed a day by the Veteran's Day holiday.
The Treasury Department is auctioning 30-year Treasury bonds, with results available shortly after 1 pm New York time.
Dow component Walt Disney reports after the closing bell, as does retailer Nordstrom .
Homebuilders skidded after the prior session's rally. Mortgage rates declined last week, with the 30-year fixed down to 4.91 percent, and home foreclosures slowing for a third consecutive month, but RealtyTrac, which puts out the foreclosure report, said rising unemployment could make that lull temporary.
President Obama announced this morning plans to hold a jobs summit in Decemberto look at ways to boost jobs growth.
THURSDAY: FDA meeting on Internet advertising starts; Buffett/Gates/CNBC Town Hall meeting; Geithner at APEC meeting in Singapore; weekly mortgage applications; weekly jobless claims; weekly crude inventories; Treasury budget; Earnings from Wal-Mart, Disney
FRIDAY: NY Fed conference on financial intermediation; international trade; import/export prices; consumer sentiment; Nicholas Cosmo court appearance; Fed's Evans speaks; Earnings from JCPenney, Abercrombie
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