Thursday, April 7, 2011

Stocks fell Thursday after another big earthquake hit northern Japan. The 7.4-magnitude earthqauke triggered tsunami warnings along Japan's devastated northern coast.

The Dow Jones industrial average fell as many as 96 points in morning trading before recovering some of those losses. Japan's stock market had already closed by the time the earthquake struck.

The Dow was down 60 points, or 0.5 percent, at 12,367 in late morning trading. The broader S&P 500 fell 4, or 0.3 percent, to 1,331. The Nasdaq composite index fell 5, or 0.2 percent, to 2,794. All three indexes had been higher in earlier trading.

The earthquake "means perhaps further economic decline in Japan," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc.

Japan is the world's third-largest economy and buys 10 percent of U.S. exports.

In the U.S., economic news was mostly positive. The Commerce Department said 382,000 people applied for unemployment for the first time last week. That was the third drop in four weeks. The decline in applications suggests layoffs are slowing.

Major retailers also reported better-than-expected sales for March at stores that have been open at least a year. Analysts had predicted declines because of cold weather and higher gas prices.

Costco Wholesale Corp. rose 4 percent after reporting a 13 percent gain in sales. Limited Brands Inc. rose 1 percent after it said its revenue increased 14 percent because of strong sales at its Victoria's Secret stores. Nordstrom Inc. and Macy's Inc. also rose about 1 percent.

Bed Bath & Beyond Inc. rose 11 percent, the most of any stock in the Standard & Poor's 500 index. The home furnishings retailer posted strong results late Wednesday and said it expected earnings to rise 10 percent to 15 percent this year.

Bond prices rose, sending their yields lower. The yield on the 10-year Treasury note fell to 3.54 percent from 3.55 percent late Wednesday.

Overseas markets rose even after the European Central Bank raised its main interest rate by a quarter point to 1.25 percent, a day after Portugal asked for a bailout.

Germany's DAX was 0.1 percent higher while the CAC-40 in France rose 0.3 percent. Britain's FTSE 100 index was flat after the Bank of England kept its main interest rate unchanged at 0.5 percent.


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