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Stocks flat in early trading after Safeway, Kohl's report disappointing earnings
NEW YORK (AP) ' Stocks opened flat Thursday after retailers reported disappointing earnings and computer maker Hewlett-Packard issued a weak profit forecast.
The Dow Jones industrial average was up nine points to 12,948 in the first half-hour of trading. The Standard & Poor's 500 index was down two points at 1,356, and the Nasdaq composite rose three points to 2,937.
The declines were broad. Of the 10 industry groups that make up the S&P 500, only one rose: utilities. Investors usually buy those stocks as havens because they don't tend to fluctuate as much as the rest of the market and they pay fat dividends.
Grocery store operator Safeway Inc. plunged 9 percent, most in the S&P 500, after reporting a 6 percent drop in profit. Grocers are struggling with rising prices for food and fuel while dealing with cost-conscious shoppers.
Department store owner Kohl's sank 5 percent after reporting that its profit shrank 8 percent during the fourth quarter on weak holiday sales. The results fell short of analysts' estimates.
Hewlett-Packard dropped 6 percent after issuing a disappointing profit outlook and reporting a 7 percent decline in sales. CEO Meg Whitman pleaded for patience from investors as she described internal challenges and other problems that contributed to a decline in earnings at one of the world's largest technology companies.
The yield on the 10-year Treasury note rose to 2.02 percent from 2 percent late Wednesday. Traders sold bonds after the government reported that claims for unemployment benefits held steady last week and the four-week average fell to its lowest point in four years. It's the latest evidence that the job market is improving, which diminishes demand for low-risk fixed-income investments like U.S. government debt.
European markets mostly fell. Germany's DAX fell 1.4 percent, France's CAC-40 was off 0.6 percent and Italy's main index was off 1.4 percent. London's FTSE was flat. The euro edged up to $1.33 against the dollar.