Stocks End Higher as Oil Slips

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Ritholtz thinks the economic data has actually indicated more serious problems than the headline figures would suggest. Instead of lots of layoffs, companies are cutting hours, he says, citing recent research from Merrill Lynch that the 0.3% decline in the average work week in April is equivalent to cutting 400,000 jobs.

He also says "people are anticipating far too much benefit from the stimulus checks" and "putting way too much faith in the Fed's ability to guide a carrier to a soft landing," which won't be easy given the enormous amount of leverage to be unwound.

Oil prices fell on profit-taking by funds after oil futures broke below an important range of $125 to $125.20 per barrel, Action Economics said. After ranging between $126.50 and $120, June WTI crude oil futures settled 17 cents per barrel lower at $124.05. Meanwhile, nationwide gasoline prices hit a new record high of $3.78 per gallon before closing lower Thursday.

Prices initially had risen after UBS AG and Sanford C. Bernstein & Co. raised their 2008 price forecasts to reflect the 30% jump in oil since the year began, with further aid from a gasoline pipeline explosion in Nigeria, according to Bloomberg News.

Another factor that may be weighing on oil prices is an expected vote by the U.S. Senate to close a legal loophole that would prevent traders from adding to positions in futures contracts on alternate exchanges after reaching their limits on the New York Mercantile Exchange, CNBC Business News reported. The Senate's proposed Consumer-First Energy Act also includes a proposal to mandate higher cash collateral for energy-futures trading and call for greater oversight of overseas trading. The bill could come to a vote by Memorial Day.

Among other stocks in the news Thursday, Agilent Technologies Inc. (A) shares rose after the company reported second-quarter GAAP EPS of 47 cents per share on a 10% revenue gain, at the high end of its outlook. Adjusted EPS of 51 was just above the top of the company's guidance of 46 to 50 cents per share. The maker of electronic and medical measurement devices sees third-quarter revenue of $1.44 billion to $1.49 billion and adjusted EPS of 52 to 56 cents, with fourth-quarter revenue expected to rise 8% to 17% from a year ago and adjusted EPS of 62 to 66 cents. S&P raised its estimate and target price and reiterated its hold rating.

CTrip.com International Ltd. (CTRP) shares fell on concerns over the impact of China's devastating earthquake on the company, which is a leading travel service provider in China. The company posted 52% higher net income in the first quarter on a 47% revenue rise on Thursday and expects second-quarter net revenue to grow by about 30%.

Major European indexes were trading mixed Thursday. In London, the FTSE 100 index rose 0.58% to 6,251.80. In Paris, the CAC 40 index inched up 0.04% to trade at 5,057.51, while Germany's DAX index was down 0.03% at 7,081.05.

In Asia, Japan's Nikkei 225 climbed 0.94% to end at 14,251.74, while Hong Kong's Hang Seng index slipped 0.08% to 25,513.71.

Treasury market

Treasuries were higher on Thursday in response to the weaker economic reports. The 10-year note moved up in price to 100-16/32 for a yield of 3.81%, and the 30-year bond climbed to 97-06/32 for a yield of 4.55%.

Bogoslaw is a reporter for BusinessWeek's Investing channel.