Wall Street rebounded Tuesday as oil prices paused in their record-breaking run and investors sifted through sales figures from retailers that were generally not as gloomy as anticipated.
The retailers' sales data still suggested, however, that high energy costs are leading consumers to alter their spending. Wal-Mart Stores Inc. said sales of groceries, flat-screen TVs and medications helped boost sales last month, but some apparel stores _ whose merchandise falls into the category of discretionary items _ again saw depressed sales as consumers budgeted more for gasoline and food.
The retail sales readings come a day after soaring oil prices knocked the Dow Jones industrial average down more than 200 points. After hitting a record of nearly $124 late Wednesday in electronic trading, crude retreated 82 cents to $121.71 a barrel on the New York Mercantile Exchange.
Mixed economic readings and lofty energy prices could keep the market in a holding pattern through the summer, said Janna Sampson, director of portfolio management at Oakbrook Investments. "With oil high and continuing to go up, it's going to be tough to get the market to have a sustainable rally."
Alfred E. Goldman, chief market strategist at Wachovia Securities, was a bit more optimistic, saying he estimates the economy is four months away from the end of an average-length recession, so the stock market should resume its climb again soon.
"Basically, the market is taking a time-out after the prior six weeks," Goldman said. "The bigger picture is a market that's in the process of transitioning from a bear to a bull, shifting from a situation where the glass is half-empty to one where the glass is half-full. And that takes time."
In a positive sign for the U.S. job market, which has seen four straight months of jobs losses, the Labor Department said Thursday the number of newly laid off workers seeking unemployment benefits dropped by 18,000 last week to 365,000 _ a larger decline than expected.
The Dow rose 60.58, or 0.47 percent, to 12,874.93.
Broader stock indicators turned higher after fluctuating in earlier trading. The Standard & Poor's 500 index rose 6.09, or 0.44 percent, to 1,398.66, and the Nasdaq composite index rose 16.74, or 0.69 percent, to 2,455.23.
Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.84 percent from 3.85 percent late Wednesday.
Wal-Mart shares rose 63 cents to $57.46, but Target Corp. fell $1.07, or 2 percent, to $52.37 after saying its same-store sales rose in April by an amount that was smaller than analysts forecast.
A weak U.S. consumer affected Toyota Motor Corp., which said late Wednesday that profit in the January-to-March period tumbled 28 percent due to the rising yen and weak North American sales. The Japanese automaker also predicted sales will drop for the fiscal year through March 2009 for the first time in several years, and profit will fall 27 percent.
Toyota's U.S.-traded shares fell $4.49, or 4.3 percent, to $100.27.
In other earnings news, American International Group Inc. is scheduled to release its first-quarter results after the close of trading. Analysts expect the insurer to post a loss. AIG shares fell 39 cents to $44.69 ahead of the report.
Gold prices rose, while the dollar declined against most other major global currencies.
The European Central Bank left its interest rates unchanged Thursday. ECB President Jean-Claude Trichet pointed to clear upside risks to price stability, indicating that the bank is unlikely to lower its rates in the near future.
The Russell 2000 index rose 2.47, or 0.34 percent, to 718.68.
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where volume amounted to 758.3 million shares.
In overseas trading, Tokyo's Nikkei index fell 1.13 percent, Britain's FTSE index rose 0.16 percent, Germany's DAX index fell 0.06 percent, and France's CAC-40 fell 0.39 percent.
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