Stocks Open Lower; Citi Rises Again
Stocks slipped at the open Thursday after the government said weekly jobless claims fell but not as much as analysts had anticipated.
Initial jobless claims fell by 6,000 last week; economists had expected claims to drop by 8,000.
"The worst of the weather effects have now faded from the claims numbers but the bottom line here is that there has been no net progress since late November," Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote in a note to clients.
"The wave of panic layoffs which struck after the Lehman failure has long gone, but the background pace of gross job losses is still too high for us to be confident meaningful payroll gains are in the offing," Shepherdson explained.
Separate reports showed the trade gap shrank 6.6 percent as oil imports dropped to their lowest level since February 1999, and mortgage rates dropped for a second straight week, remaining below 5 percent.
Also offering cause for concern, A report out of China showed inflation rose to a six-month high, escalating fears that the economy is overheating and demand for commodities and other goods may start to slow.
The Dow was down about 20 points in early trading, led by 3M and Coke . IBM led the Dow, followed by Wal-Mart .
This came after stocks pulled off a gain Wednesday as financials rallied.
Financials struggled this morning but there were a handful of notable gainers.
Citigroup was up about 2 percent today amid a fresh report of optimism about the company. This time it's a projection that it will earn $20 billion by 2012.
Part of the recent rally in Citi and other financials has been optimism about their ability to raise capital, coupled with market talk of government banning short-selling in banks in which it owns stake.
AIG rose more than 4 percent. The stock has rallied for the past five sessions for a total gain of about 50 percent.
Regional banks have fared well in the past few days amid speculation that UK bank Barclays is looking to buy a U.S. retail bank. This morning, a handful of banks were higher, including Fifth Third and Regions Financial .
Big brokerage stocks were lower as Senate Banking Committee Chairman Chris Dodd (D-Conn.) said he willgo ahead with his own financial-reform bill, which he will unveilon Monday, after talks on a bipartisan bill fell apart.
More M&A activity to report: BP has entered a $7 billion deal with US independent oil and gas producer Devon Energy. The UK oil major bought into a diverse and broad deepwater exploration portfolio in offshore Brazil.
The foreclosure rate has improved, falling 2.3 percent in February from January, according to a RealtyTrac report. But the number was up 6 percent from February 2009 and experts warned that the bad weather and procedural issues could delay foreclosures, pushing that number higher in the coming months.
In Greece, strikes against austerity measures all but paralyzed the country, grounding flights and closing schools.
Treasury Secretary Tim Geithner wrote a note to European regulatory officials, warning them not to tighten rules on hedge funds and private-equity companies as this would discriminate against U.S. entities, the Financial Times reported.
Still to Come:
THURSDAY: $2B California bond sale; 30-year auction; earnings from Nat Semi, Aeropostale
FRIDAY: Gov'ts retail-sales report; consumer sentiment; business inventories; earnings from Ann Taylor
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