Oil prices that topped $55 per barrel pressured stocks Thursday, leaving the major indexes mixed despite upbeat retail sales and strong economic news.
The Dow Jones Industrial Average gained 21.06 points, 0.2 percent, to close at 10,833.03. The Nasdaq Composite Index fell 9.10 points, 0.4 percent, to finish the day at 2,058.40. The S & P; 500 Index posted a fractional gain, up 0.39 points, 0.03 percent, to close at 1,210.47.
U.S. light crude for April delivery settled up 52 cents to $53.57 a barrel after soaring as high as $55.20, just short of the New York Mercantile Exchange futures record of $55.67 hit in late October.
Meanwhile, a favorable revision on worker productivity eased inflation worries. The productivity of U.S. workers rose at a better-than-expected annual rate of 2.1 percent during the fourth quarter, according to revised figures from the Labor Department. The initial reading of just 0.8 percent represented a sluggish number that had investors worrying about inflation.
In a separate report, the department said first-time claims for unemployment benefits dipped by 1,000 last week to a seasonally adjusted 310,000. It's the fourth decline in jobless claims in the past five weeks, and takes the four-week moving average to its lowest level since the week of Oct. 28, 2000.
And investors were also reassured by robust retail sales. Consumers encouraged by an improving economy extended their shopping spree into February, giving retailers better-than-expected sales for the month. Many companies beat Wall Street sales forecasts, including Wal-Mart Stores Inc., Target Corp., J.C. Penney Co. Inc., Nordstrom Inc., Talbots Inc. and Abercrombie & Fitch Inc.
Among local companies, shares of Unocal Corp. surged as much as 22 percent after The Wall Street Journal reported ChevronTexaco Corp. is considering making a bid for its smaller rival. El Segundo-based Unocal rose $11.50 to $65 after the opening bell before eventually settling at $60.10, up 12.3 percent by market close. The Journal said ChevronTexaco was in the early stages of its deliberations and it was unknown whether it would make a formal bid for the ninth-largest U.S.-based oil and natural gas company.
Napster Inc. rose as much as 13 percent before settling at $7.27, up 6.9 percent, after the company increased its sales estimate due to rising demand for its monthly subscription service. The L.A.-based digital music provider, which is spending $30 million to spur sales of its "Napster to Go" service to compete with Apple's iTunes, said it expects revenues of $15 million in the quarter ending this month, up from a previously expected $14 million, according to a company release.
On the down side, Tekelec shares dropped 3 percent to $16.73 after it announced it is being sued by French telephone network operator Bouygues Telecom in the U.S. District Court for the Central District of California for compensatory damages of $81 million, plus punitive damages associated with a service interruption. Bouygues Telecom alleges the service interruption was caused by malfunctioning servers provided by Tekelec. Tekelec denies the equipment was faulty and said Bouygues' claims could not support the damage figures in the complaint.
And PS Business Parks Inc. dropped 0.5 percent to close at $41.75 after the Glendale-based real estate investment trust's stock rating was downgraded to "hold" from "buy" by KeyBanc Capital Markets.
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