MARKET REPORT

Retail forecasts send stocks down

— Stock indexes closed lower Thursday, a third-straight decline, after U.S. retailers issued weak forecasts for earnings and more people filed claims for unemployment benefits.

Wal-Mart, Ross Stores and Limited Brands, the owner of Victoria’s Secret, all fell after issuing forecasts that disappointed financial analysts. Wal-Mart fell $2.59, or 3.6 percent, to $68.72.

The Dow Jones industrial average wavered between small gains and losses shortly after the opening bell, then moved lower at midmorning. It closed down 28.57 points at 12,542.38.

The Standard & Poor’s 500 index dropped 2.16 points to 1,353.33, and the Nasdaq composite finished 9.87 points lower at 2,836.94.

Falling stocks outnumbered rising ones by a ratio of 2-to-1. Consolidated volume was above average at 3.8 billion shares.

Stocks have fallen steadily since voters returned President Barack Obama and a divided Congress to power.

The Dow has dropped 5 percent from Election Day, Nov. 6.

Investors are worried thatU.S. leaders may not reach a deal before tax increases and government spending cuts take effect Jan. 1.

Bill Stone, chief investment strategist at PNC Asset Management Group in Philadelphia, said the bargaining in Washington would likely drag on until next year, weighing on stocks. “It’s hard to see the market getting a whole ton of traction until that gets settled.”

Obama will meet with congressional leaders today to talk about the budget, buthe appeared to suggest Thursday that he would insist on an increase in tax rates for top earners.

T. Dale, a portfolio manager at Security Ballew Wealth Management in Jackson, Miss., said that stocks are more likely to fall than rise, partly because of slowing global economic growth and the U.S. budget impasse.

“The market has gotten well ahead of itself,” Dale said.

Among the retailers disappointing Wall Street with lower earnings forecasts, RossStores, whose stores includes Ross Dress for Less, fell 70 cents, or 1.3 percent, to $54.44. Limited Brands dropped $1.10, or 2.4 percent, to $45.50.

The yield on the 10-year Treasury note was little changed at 1.59 percent.

Shares of NetApp, a datastorage business, jumped $3.08, or 11.3 percent, to $30.20 after the company reported earnings that were higher than analysts were expecting.

Viacom, the media conglomerate, did better than investors had expected thanks to lower costs and higher fees from cable and satellite companies for carrying its cable networks. Shares of Viacom, the owner of Nickelodeon, MTV and the Paramount movie and TV studio, rose $1.24, or 2.6 percent, to $49.23.

Shares of PetSmart, a specialty pet retailer, jumped $2.63, or 4.1 percent, to $67.48 after raising its full-year outlook.

Apple Inc.’s market value fell below $500 billion for the first time since May, as the maker of smart phones and tablets dropped $11.26, or 2.1 percent, to $525.62.

The company’s market value climbed as high as $658 billion Sept. 19, according to FactSet data.

Business, Pages 28 on 11/16/2012

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