Stocks Flat as Tech Gains, Retail Slumps

Stocks were flat, trading in a tight range, as the mood of investors soured when an index measuring services showed a decline in November.

The Dow briefly turned negative after the Institute of Supply Management's gauge of non-manufacturing activity fell to 48 percent, indicating contraction.

Stocks had opened mildly positive as a continued decline in weekly jobless claims help brighten hopes that the decline in the economy was abating—but surprisingly weak retail sales numbers tempered the enthusiasm.

Investors weighed the economic news against ramifications from one of the biggest deals in Wall Street history: The NBC Universal/Comcast deal became official ahead of the open, giving Comcast a 51 percent stake in NBCU (the parent of CNBC.com), while GE would retain a 49 percent stake.

Bank of America was helping spur a rise in bank stocks. BofA has announced it will pay back the $45 billion it took in TARP funds, which will allow it to escape from pay restrictions as it searches for a new CEO.

BofA and JPMorgan Chase led Dow gainers. The SPDR Financial exchange-traded fund gaining nearly 1 percent in the early going, reflecting strength in the sector.

Alcoa and Home Depot led the bluechip losers.

"Yesterday’s announcement from Bank of America that it would repay its TARP loans, the Comcast-GE agreement on NBC Universal, anecdotal evidence from the Fed’s Beige book report along with signs that a potential debt crisis in Dubai is moving to a workout process have all joined to provide the markets uplift today," John Stoltzfus, analyst with Ticonderoga Securities in New York, wrote in an analysis.

On the economy, the government said 457,000 jobless claims were filed last week, coinciding with a monthly productivity gain of 8.1 percent that was a bit soft against expectations..

Market gains were held in check by some dismal news from retailers.

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Macy's served as a bellwether for the group and reported that it missed November sales numbers for stores open at least a year. Sales fell 6.1 percent for the month and other retailers appeared ready to follow suit.

Macy's shares fell 1.8 percent in premarket trading, while the SPDR Retail ETF, which tracks the industry's leaders, was off 1 percent.

Retailers will be releasing their individual results for the month of November throughout the morning, with the exception of Wal-Mart, which no longer releases monthly numbers.

Technology stocks were leading the market, with Comcast keeping the Nasdaq in positive territory.

The S&P lagged the other indexes, in part because consumer-related stocks compose nearly 20 percent of the barometer. Family Dollar was the biggest percentage loser on the S&P after posting disappointing same-store sales figures.

Energy stocks also were weaker as oil prices fell. ExxonMobil was off nearly 1 percent as was the SPDR Energy ETF .

Home builder stocks were weaker after Toll Brothers said it lost $111.4 million in its fiscal fourth quarter, even though the company said it saw signs of improvement in the market.

Land manager Weyerhaeuser saw its shares leap after Credit Suisse raised the Federal Way, Wash.-based company to neutral from underperform.

Toyota Motors saw a sharp gain as fears eased that Japan would intervene on currency and drive value of the yen higher. The move would have hit major exporters such as Toyota.

Mortgage rates fell to a record low 4.71 percent, Fannie Mae said.

Across the Atlantic, the European Central Bank kept rates at a record low of 1 percent as expected. But the ECB said it would begin unwinding some of the measures it used to prop up the economy during the global financial crisis.

The White House holds its "jobs forum," with numerous corporate leaders in attendance, in an event likely to produce many headlines.

The House will vote on permanent changes to the estate tax. The proposed changes would permanently tax estates at 45 percent with an exemption for the first $3.5 million.

Across other markets, prices on Treasurys were down though off their lows for the day, particularly on the short end of the yield curve. Oil fell toward $76 a barrel before stabilizing as the dollar slipped against the euro.

Market breadth was positive on light volume, as about 512 million shares changed hands approaching 1 pm on the New York Stock Exchange.