New York: Most US stocks rose on Thursday after news that Citigroup Inc agreed to support legislation aimed at stemming home loan foreclosures, offsetting Wal-Mart’s disappointing sales and outlook.
The Dow fell, however, led down by a 7.5% decline in Wal-Mart as the discounter’s sluggish December sales signaled another downturn in consumer spending, reviving fears of a prolonged recession.
Citigroup’s reported backing of legislation that would bring relief to struggling borrowers brought on board the support of one of the largest US retail financial institutions - seen as a key move in winning support for the bill.
The foreclosure plan “has a long-term positive effect on the economy. The stock market looks six months out and something along these lines will help the market,” said Tim Smalls, head of US stock trading at Execution LLC in Greenwich, Connecticut.
Investors also snapped up some of Wednesday’s worst losers, including Microsoft and Apple, driving the Nasdaq up more than 1%.
The Dow Jones industrial average was down 27.24 points, or 0.31% to 8,742.46. The Standard & Poor’s 500 Index was up 3.08 points, or 0.34%, to 909.73. The Nasdaq Composite Index gained 17.95 points, or 1.12%, to 1,617.01.
US President-elect Barack Obama made another pitch for a massive economic stimulus plan, though there was some nervousness among investors as few new details were added.
But the Nasdaq rose, helped by a 23% jump in Sears Holdings Corp after it forecast quarterly profit above Wall Street estimates, even as its rivals posted disappointing December sales.
Microsoft rose 4.3% to $11.36, while Apple climbed 1.9% to $92.70.
But shares of Wal-Mart Stores Inc slid to $51.38, making it the top drag on the Dow as about $16.3 billion of market value was wiped from the world’s biggest retailer.
Wal-Mart’s announcement was yet another bleak sign that consumer spending, which accounts for about two-thirds of US economic activity, continues to flounder as households fret about growing unemployment and shrinking personal savings.
Trading was choppy as the broader market oscillated between losses and gains throughout the session a day before data that is expected to show more than half a million US nonfarm jobs were lost in December and unemployment rose to 7%.
The Dow closed at its lowest level since 30 December, and is down 32% from 52 weeks ago.