US stocks mostly lower a day after surge

STEVE ROTHWELL AP Business Writer Published:

NEW YORK (AP) -- Stocks are mostly lower Thursday after surging a day earlier to their latest record highs. The market gained the most in more than two months Wednesday after the Federal Reserve said it was trimming its stimulus efforts. Investors saw the decision as a vote of confidence in the economy.

KEEPING SCORE: The Standard & Poor's 500 index fell two points, or 0.1 percent, to 1,808, as of 2:53 p.m. Eastern time. The Dow Jones industrial average was essentially flat at 16,167. The Nasdaq composite fell 12 points, or 0.3 percent, to 4,057.

BACK IN THE GREEN: The S&P 500 is up 0.1 percent for the month after moving into the green for the first time in December following Wednesday's big rally. If the gains hold, the index will have advanced for 10 of the 12 months this year.

THE ECONOMY: The number of people seeking U.S. unemployment benefits rose 10,000 last week to 379,000, the highest since March. The increase may reflect volatility around the Thanksgiving holidays.

FED ACTION: Investors were happy to get more reassurance Wednesday from the Fed that interest rates would stay low after the stimulus was removed, said Eric Weigand, a senior portfolio manager at U.S. Bank.

The pace of the reduction in the Fed's bond purchases, from $85 billion to $75 billion a month, was also encouraging. "It was not too hot and not too cold," Weigand said.

TARGET TARGETED: Target fell $1.39, or 2 percent, to $62.16 after the company said that about 40 million credit and debit card accounts may have been compromised by a data breach that happened just as shoppers flooded into stores for Black Friday. Customers who used credit cards between Nov. 27 and Dec. 15 at the store may be exposed. The Secret Service is investigating.

ZUCKERBERG SALE: Facebook fell 52 cents, or 1 percent, to $55.05 after the company said it will sell 70 million shares, including more than 41 million held by founder and CEO Mark Zuckerberg. The social media's stock has surged since the summer, more than doubling since the end of July on optimism that the company's mobile strategy is working.

BIGGEST WINNER: Business software company Oracle jumped $2.32, or 7 percent, $36.92 after its earnings beat Wall Street forecasts. The business software maker earned $2.55 billion, or 56 cents per share. Revenue rose 2 percent to $9.28 billion from $9.09 billion. Oracle rose the most of any stock in the S&P 500.

BIGGEST LOSER: Darden Restaurants slumped after the restaurant company said it will spin off its Red Lobster chain and not open any new Olive Gardens. Darden dropped $2.50, or 5 percent, to $50.42, making it the biggest loser in the S&P 500.

TARNISHED GOLD:

The price of gold dropped $41.40, or 3.4 percent, to close at $1,193.60 an ounce. Gold hadn't settled below $1,200 an ounce in more than three years. Interest rates are rising and the dollar is gaining after the Fed said it would pare back its bond purchases. Traders are selling gold because they see less risk of inflation from the Fed's stimulus program.

BONDS:

The yield on the 10-year Treasury note rose to 2.92 percent from 2.89 percent late Wednesday. The yield climbs when bond prices fall. Demand for bonds was lower Thursday as traders anticipated less buying from the Fed.

FADING POWER: The stocks of power companies fell the most of the 10 industry sectors that make up the S&P 500. Investors buy utility stocks because they pay big dividends. As bond yields rise, those stocks become less attractive.

GLOBAL MARKETS: In Europe, the FTSE 100 index of leading British shares rose 1.4 percent to 6,584 while Germany's DAX rose 1.7 percent to 9,335. Tokyo's Nikkei 225 index increased 1.7 percent to 15,859.

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