US stocks stall

Wall Street meandered through a lacklustre session today, unimpressed by better-than-expected retail sales and a drop in unemployment claims that indicated the US economy might be turning around.

The major indexes showed little change in sluggish trading that analysts attributed to profit-taking from last week’s big rally. They also said investors are waiting to see more fourth-quarter results before making substantial commitments to stocks.

The Dow Jones industrial average closed down 26.23, or 0.3%, at 10,067.86.

Broader stock indicators fared moderately better. The Standard & Poor’s 500 index gained 1.41, or 0.1%, to 1,156.55, while the Nasdaq composite index advanced 2.35, or 0.1%, to 2,047.24.

The approach of fourth-quarter earnings reports this month also prompted caution among investors. Unlike last week, when general enthusiasm about a 2002 recovery propelled the market higher, buyers now want more specifics. They hope the reports will give them a better idea of exactly when business will begin to grow, and at what rate.

Indeed, after advancing rapidly during the holidays, the major indexes have pulled back and now are hovering in the range they were before Christmas; about 10,000 for the Dow and 2,000 for the Nasdaq.

Even better-than-expected unemployment and retail figures today were not enough to incite buying although a few weeks ago the same information might have been enough to start a rally.

The Labour Department reported that new claims for unemployment benefits fell by 58,000 last week to 395,000, the lowest level in three weeks. Analysts said it could be a further sign that the jobs market is stabilising after the huge layoffs that followed the September 11 terrorist attacks.

Retail sales for December also were stronger than expected, particularly for discounters. Those figures are closely watched because consumer spending accounts for two-thirds of the economy.

Wal-Mart rose 60 cents to dlrs 57.00 on news that its December sales rose 8% in stores open at least a year, more than 2% above analyst expectations.

Investors also rewarded retailers that did not fare as poorly as anticipated. Gap gained dlrs 1.83 to dlrs 16.35 after reporting an 11% drop in December sales at stores open at least a year; analysts had predicted an 18% decline.

But the news failed to excite the broader market, which has been pulling back all week after a big New Year’s rally.

Technology stocks, among the biggest beneficiaries of the recent advance, sagged for a third session. IBM fell dlrs 2.35 to dlrs 122.14, while Intel lost 71 cents to dlrs 34.65.

Financial stocks fared better. American Express gained 62 cents to dlrs 37.77.

Declining issues led advancers 8 to 7 on the New York Stock Exchange. Volume totalled 1.28 billion shares, compared with 1.45 billion on Wednesday.

The Russell 2000 index of smaller companies advanced 0.57 to 495.31.