Stocks recovered from an early loss Thursday, pushing the Dow Jones industrial average within four points of 13,000. Investors were encouraged by more good news on U.S. jobs, but gains were limited by poor results from retailers such as Safeway and Kohl’s.
The Dow was up 35 points at 12,973 just after 3 p.m. EST. In the morning, it rose as high as 12,996. On Tuesday, the Dow briefly traded above 13,000 for the first time in nearly four years.
The broader Standard & Poor’s 500 was up three points to 1,361, and the Nasdaq composite was up 16 points to 2,950.
Investors were encouraged after the government reported that the number of people seeking unemployment benefits last week was unchanged, and the four-week average was the lowest in four years.
High unemployment has been a problem for retailers, which have been forced to slash prices even though they are paying more to make and ship their goods. The burden showed in Thursday’s earnings reports.
Kohl’s, the department store chain, sank 5 percent after weak holiday sales caused it to miss Wall Street estimates for revenue and earnings. Grocery store chain Safeway Inc. plunged 10 percent after reporting a 6 percent drop in profit.
Part of the problem is the rising cost of gas, which could hurt the economic recovery. The price of gas is rising as tensions mount over Iran’s nuclear program. A gallon of regular sells for $3.61 on average, the highest on record this time of year.
The price of oil jumped again Thursday, to $107.83, a nine-month high and up $1.52 for the day. Besides Iran, analysts blamed the falling U.S. dollar, which makes oil more expensive for investors holding foreign money.
The euro jumped to a two-month high against the dollar, $1.3333, up almost a penny from Wednesday, after business confidence surged in Germany.
Dillard’s, another department store chain, and the discount chain Target also missed analysts’ estimates. Earlier this week, Wal-Mart fell short on earnings and revenue after aggressive discounts for the holidays cut into profit margin.
Sears Holdings Corp., which owns Sears, Kmart and Land’s End, also missed estimates for revenue and per-share earnings. Its stock soared 17 percent, but that was because it outlined plans to spin off some stores and sell others.
For the most part, U.S. stocks have been rising since Thanksgiving, as the most potent fears of last summer _ that the country would enter another recession, and that the European debt crisis would damage the U.S. economy _ have dissipated.
The market has yet to settle into a definitive trend, however. In the 35 completed trading days so far this year, the Dow has risen on 20 and fallen on 15.
“On Tuesday the world is ending, on Wednesday the opposite happens, after two or three weeks we’re right where we started because not much happened,” said Bill Hampel, chief economist of the Credit Union National Association.
Of the S&P 500’s 10 industry groups, seven were up in afternoon trading. Financials led the charge forward, partly because of a calm day for news about Greek debt talks. U.S. bank stocks were pummeled last year as investors worried about exposure to European debt, but some of those concerns have eased.
On Thursday, the Greek Parliament approved a plan to wipe out euro107 billion of debt that it owes to investors who hold its government bonds. Greece is expected to make a formal offer to bondholders Friday.
Earlier this week, Greece locked down a second bailout from the International Monetary Fund and other countries that use the euro currency. The bailout is designed to prevent a default on Greece’s debt, which could shock the world financial system.
But deep problems continue to haunt Greece, including a recession and the prospect that investors will shy away from buying its bonds in the future. The U.S. market has been yanked up and down this year by incremental headlines from Greece.
David Trone, managing director of JMP Securities, a brokerage, said financial stocks were up because of the relative calm in Greece. U.S. bank stocks had plummeted last year over fears about their exposure to European debt.
Otherwise, Thursday’s news out of Greece was too incremental to move the market much one way or the other. “Investors aren’t feeling any happier or any worse than they were yesterday,” Trone said.
In the bond market, yields for U.S. Treasurys fell after the government sold seven-year notes at a lower yield than the average over the past four months. The yield on the 10-year Treasury fell to 1.98 percent from 2 percent Wednesday.
Among other stocks making big moves in the U.S.:
_ HSN Inc., which runs a cable TV channel for home shopping, rose 1.9 percent after its profit climbed 13 percent in the most recent quarter.
_ Vivus Inc., a drugmaker, rose 80 percent after federal regulators said that Qnexa, a drug Vivus is developing for weight loss, should be approved.
_ CEC Entertainment Inc., which owns Chuck E. Cheese children’s restaurants, rose 1.6 percent after an analyst for Morgan Keegan upgraded the company. Morgan Keegan said store remodels may attract more guests.
Bank of England policy maker Adam Posen said he
Neel Kashkari, who was on the policy frontlines when Lehman Brothers Holdings Inc. crumpled in 2008, warns European governments against pushing Greece too far as they impose conditions for aid.
U.S. stocks opened lower Friday after Greece’s bailout deal was put on hold, a day after it seemed that the country had satisfied its creditors.
In the first half hour of trading, the Dow Jones industrial average fell 99 points to 12,792. The broader S&P 500 was down 10 points to 1,342. The Nasdaq composite fell 20 points to 2,907.
On Thursday, Greek leaders agreed to private sector wage cuts, civil service layoffs and cuts in government spending.
But finance ministers from the other 16 countries that use the euro insisted that Greece save an extra euro325 million ($430 million), pass the cuts through parliament and guarantee that they will be enforced after planned elections in April.
The decline was broad free instant credit score. All ten sectors of the S&P 500 were down, led by materials companies, down 1.9 percent. Financial companies fell 1.3 percent.
Among stocks making big moves:
_ LinkedIn rose 12.5 percent. The online networking company announced that fourth quarter earnings had soared and revenue doubled.
_ Jeans maker True Religion Apparel plunged 24 percent. The company reported earnings that were far below what anlaysts were expecting and analysts slashed their ratings on the stock, citing weak sales and big markdowns.
Former U.S. Treasury Secretary Lawrence Summers said the U.S. economy is not yet at
The world
New Zealand police raided several homes and businesses linked to the founder of Megaupload.com, a giant Internet file-sharing site shut down by U.S. authorities, on Friday and seized guns, millions of dollars, and nearly $5 million in luxury cars, officials said.
Police arrested founder Kim Dotcom and three Megaupload employees on U.S. accusations that they facilitated millions of illegal downloads of films, music and other content costing copyright holders at least $500 million in lost revenue. Extradition proceedings against them could last a year or more.
With 150 million registered users, about 50 million hits daily and endorsements from music superstars, Megaupload.com was among the world’s biggest file-sharing sites. According to a U.S. indictment, the site, which was shut down Thursday, earned Dotcom $42 million in 2010 alone.
Although the company is based in Hong Kong and Dotcom lives in New Zealand, some of the alleged pirated content was hosted on leased servers in Virginia, and that was enough for U.S. prosecutors to act.
New Zealand police served 10 search warrants at several businesses and homes around the city of Auckland.
Police spokesman Grant Ogilvie said the seized cars include a Rolls Royce Phantom Drophead Coupe worth more than $400,000 as well as several Mercedes. Two short-barreled shotguns and a number of valuable artworks were also confiscated, he added.
He said police seized more than $8 million, money that was invested in various New Zealand financial institutions and which has now been placed in a trust pending the outcome of the cases.
New Zealand’s Fairfax Media reported that the four defendants stood together in an Auckland courtroom in the first step of the extradition proceedings.
Dotcom’s lawyer raised objections to a media request to take photographs and video, but then Dotcom spoke out from the dock, saying he didn’t mind photos or video “because we have nothing to hide.” The judge granted the media access, and ruled that the four would remain in custody until a second hearing Monday.
Dotcom, Megaupload’s former CEO and current chief innovation officer, is a resident of Hong Kong and New Zealand and a dual citizen of Finland and Germany who had his name legally changed. The 37-year-old was previously known as Kim Schmitz and Kim Tim Jim Vestor.
Two other German citizens and one Dutch citizen also were arrested and three other defendants _ another German, a Slovakian and an Estonian _ remain at large.
Megaupload has retained Washington power attorney Bob Bennett to defend it, according to a person inside the company. Bennett is best known for representing former President Bill Clinton during the Monica Lewinsky scandal. The person within Megaupload spoke on condition of anonymity because he was not authorized to discuss the company’s plans.
The Electronic Frontier Foundation, which defends free speech and digital rights online, said in a statement that the arrests set “a terrifying precedent. If the United States can seize a Dutch citizen in New Zealand over a copyright claim, what is next?”
The indictment was unsealed one day after websites including Wikipedia and Craigslist shut down in protest of two congressional proposals intended to make it easier for authorities to go after sites with pirated material, especially those with overseas headquarters and servers.
Before Megaupload was taken down, the company posted a statement saying allegations that it facilitated massive breaches of copyright laws were “grotesquely overblown.”
“The fact is that the vast majority of Mega’s Internet traffic is legitimate, and we are here to stay. If the content industry would like to take advantage of our popularity, we are happy to enter into a dialogue. We have some good ideas. Please get in touch,” the statement said.
Several sister sites were also shut down, including one dedicated to sharing pornography files.
News of the shutdown seemed to bring retaliation from hackers who claimed credit for attacking the Justice Department’s website. Federal officials confirmed it was down for hours Thursday evening and that the disruption was being “treated as a malicious act payday loans online.”
A loose affiliation of hackers known as “Anonymous” claimed credit for the attack. Also hacked was the site for the Motion Picture Association of America, which has campaigned for a crackdown on piracy.
According to the indictment, Megaupload was estimated at one point to be the 13th most frequently visited website on the Internet. Current estimates by companies that monitor Web traffic place it in the top 100.
Megaupload is considered a “cyberlocker,” in which users can upload and transfer files that are too large to send by email. Such sites can have perfectly legitimate uses. But the Motion Picture Association of America estimated that the vast majority of content being shared on Megaupload was in violation of copyright laws.
The website allowed users to download some content for free, but made money by charging subscriptions to people who wanted access to faster download speeds or extra content. The website also sold advertising.
Megaupload was unique not only because of its massive size and the volume of downloaded content, but also because it had high-profile support from celebrities, musicians and other content producers who are most often the victims of copyright infringement and piracy. Before the website was taken down, it contained endorsements from Kim Kardashian, Alicia Keys and Kanye West, among others.
The company listed Swizz Beatz, a musician who married Keys in 2010, as its CEO. He was not named in the indictment and declined to comment through a representative.
The five-count indictment, which alleges copyright infringement as well as conspiracy to commit money laundering and racketeering, described a site designed specifically to reward users who uploaded pirated content for sharing, and turned a blind eye to requests from copyright holders to remove copyright-protected files.
For instance, users received cash bonuses if they uploaded content popular enough to generate massive numbers of downloads, according to the indictment. Such content was almost always copyright protected, the indictment said.
The Justice Department said it was illegal for anyone to download pirated content, but their investigation focused on the leaders of the company, not end users who may have downloaded a few movies for personal viewing.
A lawyer who represented the company in a lawsuit last year declined to comment Thursday. Efforts to reach an attorney representing Dotcom were unsuccessful.
Although Megaupload is based in Hong Kong, the size of its operation in the southern Chinese city was unclear. The administrative contact listed in its domain registration, Bonnie Lam, did not respond immediately for a request for comment sent to a fax number and email address listed.
The indictment was returned in the Eastern District of Virginia, which claimed jurisdiction in part because some of the alleged pirated materials were hosted on leased servers in Ashburn, Virginia. Prosecutors there have pursued multiple piracy investigations.
The Justice Department also was investigating the “significant increase in activity” that disrupted its website. It said in a statement that it was working to “investigate the origins of this activity, which is being treated as a malicious act until we can fully identify the root cause.”
The site appeared to be working again late Thursday. A spokesman for the Motion Picture Association of America said in an emailed statement that the group’s site also had been hacked, but it too appeared to be working later in the evening.
“The motion picture and television industry has always been a strong supporter of free speech,” the spokesman said. “We strongly condemn any attempts to silence any groups or individuals.”
____
Matthew Barakat reported from McLean, Virginia. AP Business Writer Daniel Wagner in Washington contributed to this report.
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