A late rally lifted stocks to a final mild selloff level, completing a four-day pattern so far in 2011 that sees the market bust higher, consolidate, bust higher, consolidate.
Does that mean we know what to expect on Friday?
The Dow Jones Industrial Average lost 26 points to finish at 11,697. Despite the milquetoast finish, it was a trading day with relative volatility — the Dow initially cleared 11,700, then plunged 70 points to its session low before its steady climb to the finish.
The S&P 500 climbed 3 points to 1274, but the Nasdaq managed a winning day, rising 8 points to 2710. Chip stocks significantly helped out the tech sector — the Philadelphia Semiconductor Index rose 1.8%, led by a strong session from graphics chipmaker Nvidia (NASDAQ:NVDA), which jumped nearly 14%.
Commodities sold off, while the precious metal trade was relatively quiet — gold and silver prices both slipped fractionally. And we saw another sharp selloff in the rare earth metals sector, suggesting the speculation there has cooled off significantly for now.
Oil prices fell 2.1% to $88.35 a barrel, which isn’t good news for oil stocks, but does help out consumers.
And it appears that consumers are in need of such help. After all the talk of how the holiday shopping season was gangbusters for the retail sector, the proof wasn’t exactly in the pudding on Thursday.
On the whole, the sector’s same-store sales reports for December were a mild disappointment: as Briefing.com reported, Retail Metrics said combined same-store sales rose 3.2%, compared with expectations for a 3.5% rise.
Target (NYSE:TGT) was a specific disappointment among bigger names, posting a 0.9% rise in holiday-month same-store sales, when expectations were closer to 4%. The stock closed almost 7% lower.
Of course, the conundrum is that the day’s results only added to what has been a steady underpeformance by retail stocks going back December. The SPDR S&P Retail (NYSE:XRT) exchange-traded fund was 1.4% lower on the day, and has now slipped 3.3% in the last three trading days.
Whether the high unemployment rate has been a factor in retail sales — and whether it will continue to be — should get some illumination in the form of Friday’s jobs report for December. The data comes on the heels of very impressive job data on Wednesday. A significant upside surprise should help the market do what it has done on every other day this year.
