Stocks Down After Data

Morningstar

U.S. Market
After surging Wednesday on economic optimism, stocks fell back into the red as data released Thursday morning sent many equity investors for the exits.

Jobless claims for the week ended Dec. 14 rose to 379,000, a 10,000 increase from last week and much higher than the expected reading of 345,000. It was the highest number of claims in more than eight months, though claims numbers can be volatile during the holiday season. Claims for the week ended Dec. 7 were revised upward to 369,000.

Existing-home sales fell by 4.3% last month compared with October's reading, more than twice the 2.0% decline that economists had expected. Year-over-year sales fell 1.2%, the first time in more than two years that the number has dropped compared with a year earlier. Several economists point to higher mortgage rates having an impact on the slower sales.

Meanwhile, the Philadelphia Fed business conditions index rose to 7.0 this month, up slightly from 6.5 in November. Despite the increase, the index fell short of economists' forecasts and remains well lower than the October reading of 19.8.

Separately, the Conference Board's leading economic indicator index rose by 0.8% in November, in line with expectations. It marked the fifth straight month of an increase for the index, which indicates likely positive economic momentum for the coming year.

The Dow was flat at midday, but the S&P 500 and the Nasdaq had lost 0.2% and 0.3%.

Stocks on the Move
After Wednesday's closing bell, Oracle (ORCL) reported results for its second fiscal quarter, posting tepid revenue growth but generating record free cash flow as measured on a trailing 12-month basis. Total company revenues grew 2% versus the prior year, primarily supported by the resiliency of its software maintenance revenue stream, which grew 6%. Maintenance revenues were 49% of total quarterly revenues, and the strength in this reporting segment is a validation of the switching costs of the company's products, say Morningstar analysts. Shares were 4.8% higher at midday.

Facebook (FB) shares were 2.6% lower at midday after the firm announced an offering of 70 million shares, including 27 million shares from Facebook itself. The majority of the remainder will come from CEO Mark Zuckerberg's stake in the social-networking company.

Darden Restaurants (DRI) posted a drop in second-quarter profit to $19.8 million. Revenue improved to $2.05 billion, but earnings per share and sales fell short of Wall Street expectations. The firm also said it will be spinning off or selling its Red Lobster chain. Shares were down by 4.6% at midday.

ConAgra Foods (CAG) shares were up by more than 6% at midday after the firm's second-quarter net income rose to $248.7 million compared with last year's tally of $211.6 million. Revenue increased by 26.5% year over year, and earnings and sales exceeded expectations. The firm also maintained its full-year earnings-per-share forecast.

Foreign Markets
Stocks in Asia were mixed Thursday. The Shanghai Composite and the Hang Seng each lost 1.0% and 1.1%. The Nikkei 225 rose by 1.7%.

European stocks were higher following Wednesday's bullish U.S. market run and ahead of an economic summit in Brussels. The FTSE 100 was 1.4% higher. The Paris CAC had gained 1.6%, and the DAX was up by 1.7%.

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