Stocks sink as Congress heads for another showdown
NEW YORK (AP) — The stock market pulled back slightly Thursday, a day after the Dow Jones industrial average posted its strongest gain in more than a year.
Retailers reported mixed sales and the prospect of a new budget battle in Congress helped nudge stocks lower.
The Dow Jones industrial average was down 25 points to 13,387 an hour after the opening bell. UnitedHealth Group led the Dow lower, sinking $1.65 to $52.88, a 3 percent drop, after analysts at Deutsche Bank and other firms cut their ratings on the insurer's stock.
The Standard & Poor's 500 index was off two points at 1,460 and the Nasdaq composite slipped three points to 3,110.
The Dow soared 308 points Wednesday, its largest point gain since December 2011. The rally was ignited after lawmakers passed a bill to avoid a combination of government spending cuts and tax increases that have come to be known as the "fiscal cliff." The law passed late Tuesday night averted that outcome for now, but other fiscal squabbles are already looming in Congress including disagreements over raising the government's borrowing limit.
Ross Stores led the S&P 500 with a 6 percent gain in early trading. The retailer said sales at stores open for at least a year increased 11 percent during the holiday shopping season. Ross Stores' stock was up $3.65 to $58.09.
Nordstom Inc. surged 2 percent after the department-store chain also reported strong holiday sales, especially in the South and Midwest. Nordstrom's stock was up $1.21 to $54.84.
Other retailers struggled during the holidays as shoppers held out for deep discounts.
Family Dollar Stores sank 12 percent after reporting earnings that fell short of analysts' projections. The company also forecast a weaker outlook for the current period and full year. Family Dollar's stock lost $7.25 to $56.75.
Hormel Foods, known for making Spam and other meat products, said Thursday that it's buying Skippy, the country's No. 2 peanut butter brand, for about $700 million, from Unilever. Hormel's stock jumped 5 percent, or $1.56, to $33.60.