Stocks dip as protests in Egypt intensify

NEW YORK (AP):

Stocks dipped yesterday as concerns over violent protests in Egypt weighed against better-than-expected economic news in the United States.

Clashes continued in Egypt between pro- and anti-government demonstrators, leaving some analysts worried about their impact on oil-rich countries throughout the Middle East like Saudi Arabia.

"That's the fear," said Peter Cardillo, chief market economist at Avalon Partners.

But better-than-expected Decem-ber sales figures sent retail companies higher. Consumer discretionary companies in the Standard and Poor's 500-stock index gained one per cent after national chains reported that sales were nearly double what analysts had forecast, despite heavy snowstorms in much of the nation. Costco Wholesale Corporation, Limited Brands Inc, Nordstrom Inc and Gap Inc all gained more than three per cent.

The S&P 500 - the benchmark for most US mutual funds - fell two points, or 0.1 per cent, to 1,302 in mid-day trading. The Dow Jones industrial average fell 10 points, or 0.1 per cent, to 12,033. The Nasdaq composite gained less than a point to 2,749.

Consumer discretionary stocks were the best performers among the 10 company groups that make up the S&P index. Energy companies had the largest fall, down 0.7 per cent.

Among the positive economic reports, the Labour Department said Thursday that fewer people applied for unemployment benefits last week. A separate report showed that worker productivity in December rose by its largest amount since 2002. Economists say many employers have reached the limit in terms of how much work they can squeeze from their employees.

The Commerce Department said that factory orders rose in December, the fifth gain in six months.

Drugmaker Merck & Co fell 2.6 per cent after it issued a full-year profit forecast that was lower than analysts had expected. The company was the worst performer among the 30 stocks that make up the Dow average.

Warehouse club operator BJ's Wholesale Club Inc rose 13.5 per cent after it said it is considering selling itself after months of buyout speculation.

The better economic news pushed Treasury prices lower. The yield on the 10-year Treasury note rose to 3.51 per cent from 3.48 percent late Wednesday. Bond prices move in the opposite direction of their yields