Stocks finished modestly lower Thursday, after oil prices jumped and an unexpected rise in existing home sales pushed Treasury yields higher. Bulls seemed cautious with the blue-chips in sight of six-year highs, says Standard & Poor's MarketScope. After the market close, Google (GOOG
) shares rose on news that it will be added to the S&P 500 index, replacing replacing Burlington Resources (BR
The Dow Jones industrial average fell 47.14 points, or 0.42%, to 11,270.29, led downward by IBM (IBM
). The broader Standard & Poor's 500 index dropped 3.37 points, or 0.26%, to 1,301.67. The tech-heavy Nasdaq composite index slipped 3.2 points, or 0.14%, to 2,300.15, supported by strength in chip stocks like Advanced Micro Devices (AMD
Economic data sparked interest-rate jitters Thursday. February existing home sales rose 5.2% to 6.9 million units, more sharply than expected. The report ensures the Fed will raise interest rates 25 basis points on Tuesday and makes another hike in May even more likely, says S&P MarketScope.
Elsewhere, initial jobless claims unexpectedly fell 11,000 to 302,000 for the week ended March 18. The numbers show a solid job market, says Action Economics. February durable goods orders and new home sales are on the docket Friday.
On the corporate side, General Motors (GM
) drew continued attention on the sale of 78% of its GMAC Commercial Holding unit to a consortium of investors for $1.5 billion in cash. The automaker's shares were lower in afternoon trading, after rising modestly Wednesday on news of a deal with former unit Delphi and the United Auto Workers union.
Software giant Microsoft (MSFT
) declined after announcing it would reorganize its Windows unit. The move came days after the company said its long-awaited Windows Vista operating system won't be available to consumers until January.
Investors were also digesting a disappointing outlook from Adobe Systems (ADBE
). The software maker said sales this quarter will be $640 million to $670 million, less than the $677 million some analysts expected.
M&A activity was another focus. Dell (DELL
) was modestly lower after announcing that it would buy high-end computer maker Alienware in a bid for the top-shelf gaming market.
In earnings news, cereal maker General Mills (GIS
) rose after posting 7% higher third-quarter profit, topping analyst estimates.
Homebuilder KB Home (KBH
) was higher after posting 42% higher second-quarter earnings on a 34% increase in revenue.
In broker calls, UBS Financial upgraded Yahoo (YHOO
) from neutral to buy. Prudential Equity Group also upgraded its ratings for oil companies ConocoPhillips (COP
) and Marathon Oil (MRO
In the energy markets Thursday, May West Texas Intermediate crude oil futures closed up $2.14 at $63.91 a barrel.
European markets finished mixed. In London, the Financial Times-Stock Exchange 100 index fell 18.6 points, or 0.31%, to 5,988.9. Germany's DAX index rose 14.8 points, or 0.25%, to 5,947.78. In Paris, the CAC 40 index was unchanged at 5,194.78.
Asian markets finished mostly higher. Japan's Nikkei 225 index edged lower 6.11 points, or 0.04%, to 16,489.37. In Hong Kong, the Hang Seng index rose 128.36 points, or 0.82%, to 15,771.17. Korea's Kospi index added 2.43 points, or 0.19%, to 1,312.26.
Treasury yields moved higher after the existing home sales data. Prices for 10-year Treasury notes finished lower at 98-06/32 with a yield of 4.73%, while 30-year bonds fell to 96-04/32 for a yield of 4.74%.