Stocks fall on weak retail sales

Dow dropped 38, decliners over advancers by 25% & NAZ was up 4. After the opening, Dow was down over 100 but has recovered much of those losses. The averages I follow are little changed following the markets recovery from early steeper losses.

But, oil is down on the dreary news about US retail sales:

CLG09.NYM

...Crude Oil Feb 09

....41.02

... 1.61 .......(3.8%)

Applications for unemployment insurance dropped 24K to 467K last week (a holiday shortened week). The 4 week average fell 27K to 526K. However, the number claiming jobless benefits jumped 101K unexpectedly to 4.6M, more than expectations of 4.5M (& highest level since Nov 1982 when the labor force was much smaller. This gets us prepared for tomorrow's monthly report which is expected to show unemployment has reached 7%.

•Jobless Benefit Rolls in U.S. Jump to 26-Year High; First-Time Claims Fall


Big retailers are reporting very ugly sales numbers. Wal-Mart (WMT), the best performing Dow stock last year & an S&P 500 Dividend Aristocrat, posted a smaller sales gain than expected & cut its earnings outlook. Their same store sales, a critical measure of the health of their business, fell 1.2% (1.7% after subtracting out gasoline sales). This shows lower income customers are reducing purchases. Saks (SKS), the Gap (GPS), Abercrombie & Fitch (ANF), Macy's (M), etc. also reported glum numbers. Their stocks sold off with WMT leading the charge down, off 3.85 (it had been down over 5 in early trading). Macy's said it's closing 11 stores. Walgreen (WAG), the largest drug store chain & an S&P 500 Dividend Aristocrat, will lay off 9% (1000) of its staff in the coming months.

•Wal-Mart, Gap, Macy's Trim Forecasts After Shoppers Curb Holiday Purchases

• Walgreen will cut 1,000 management jobs in 2009- AP

Dow is 8731 presently. It'll have to get back above 9K to post a gain for the week.