Although stocks began the day only marginally lower, the descent has since picked up speed. With roughly an hour left in the trading session, the Dow Jones Industrial Average (DJINDICES: ^DJI ) is lower by 75 points, or 0.57%, as of 2:50 p.m. EST.
What's weighing on stocks
The irony of today's downward trend is that two pieces of relatively positive economic news came out this morning. First, data from the U.S. Department of Labor showed that seasonally adjusted initial jobless claims fell 7.8% last week to 343,000. According to my colleague Justin Loiseau, this represents the fourth straight week of declines after a 25% spike for the week ended Nov. 10. To read more about the report, follow this link to Justin's analysis and this one (link opens PDF) to the Labor Department's official press release.
Secondly, retail sales for the month of November rose 0.3% compared to October. Although this missed economists' consensus estimate for a 0.5% increase, it nevertheless represented a 3.7% gain over the same month last year. To delve into this more, click here for our take and here (link opens PDF) for the official press release from the U.S. Department of Commerce.
Individual company news
Shares of Hovnanian Enterprises (NYSE: HOV ) are down sharply after the homebuilder reported a loss of $84.4 million, or $0.59 per share, for its fiscal fourth quarter ended Oct. 31. While the bottom-line figure missed the consensus estimate of a $0.06 per-share loss, the company would have recorded a profit but for $87 million in charges related to the extinguishment of debt. In addition, revenue climbed considerably over the same quarter last year, up 43% to $487 million.
According to Hovnanian's chairman and CEO, Ara K. Hovnanian: "We are very happy to report a pre-tax profit before debt extinguishment gains or losses for the first time in 25 quarters. ... After the worst downturn that the home-building industry has ever seen, I do not think there is any question that the industry is finally in a period of modest recovery."
To read more about the impact of housing on the economy, check out Morgan Housel's take on the homebuilders' third-quarter earnings.
Shares of Best Buy (NYSE: BBY ) are up more than 15% on news that the company's founder, Richard Schulze, is preparing a takeover bid for the company. Citing an unnamed source, the Minneapolis Star-Tribune reported that Schulze will make a "fully financed offer to purchase the consumer electronics giant by the end of the week, possibly on Friday."
Although it remains unclear exactly how much Schulze and his affiliates will offer, people expect it to come in around the $5 billion to $6 billion mark. The company's value has fallen 45% since Schulze first outlined his takeover plan over the summer. Shares closed yesterday at $12.08 and are currently changing hands for $14.04, though the Star-Tribune believes institutional investors will push for a price closer to $17.
In terms of Dow stocks, technology companies are the best-performing group today, with Hewlett-Packard, Intel, Microsoft, and Cisco Systems holding four out of the index's top six slots. It was announced earlier today that Google's (NASDAQ: GOOGL ) map application is now available on Apple's (NASDAQ: AAPL ) app store. This comes as a relief to many iPhone users who became upset at Apple's decision to replace the popular app with its own, less accurate version. The decision, moreover, is widely attributed to the recent shakeup among top executives at the Cupertino-based technology giant.
Meanwhile, many of the index's stalwart's are heading lower, with both ExxonMobil and Boeing down for the day. To learn about the factors weighing on these stocks, check out my colleague Matt Thalman's take here.
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