Stocks Start Lower after Jobs and Trade data

U.S. stocks started lower Thursday after a report showed first-time applicants for jobless benefits climbed last week and U.S. trade gap shrank to $44.8 billion in July. The Dow Jones Industrial Average lately fell 11.50 points to 11,403.36. The Standard & Poor’s 500 Index declined 2.39 points to 1,196.23. The Nasdaq Composite Index was off 2.81 points at 2,546.13.

Applications for unemployment compensation rose slightly last week, indicating little change in a weak U.S. jobs market in which net hiring remains near a standstill. Jobless claims rose to 414,000 from 412,000, the Labor Department said Thursday.

The trade deficit the United States runs with the rest of the world shrank in July, according to data released Thursday, as record exports helped offset the biggest trade gap with China in 10 months. The Commerce Department said the trade deficit narrowed to a seasonally adjusted $44.8 billion in July from $51.6 billion in June, a decline of 13.1% — the largest percentage decline since February 2009.

Following a significant trimming of senior executive ranks as part of his “Project New BAC” program to streamline operations and drastically cut expenses, Bank of America (BAC) CEO Brian Moynihan has plans to split the company’s banking operations into consumer and commercial units, which will include up to 600 branch closings, according to Charlotte, N.C.-based WCNC News Channel 36.

The head of the European Central Bank on Thursday signaled to the markets that interest rate increases will likely be paused for the time being due to heightened economic risks, both in the eurozone and globally. Bank head Jean-Claude Trichet said that inflation risks are “broadly balanced,” dropping his earlier stance that the risk was to the upside. At the same time, he said the eurozone economy was expected “to grow moderately subject to particularly high uncertainty and intensified downside risk.”

Oil prices hovered near $89 a barrel Thursday after a U.S. energy report showed mixed signals about demand. By early afternoon in Europe, benchmark oil for October delivery was down 7 cents to $89.27 in electronic trading on the New York Mercantile Exchange.

Smithfield Foods Inc.’s fiscal first-quarter net income rose 8 percent, as the world’s biggest hog producer charged higher prices and sold more packaged meats. Smithfield earned $82.1 million, or 49 cents per share, for the three months ended July 31. That’s up from $76.3 million, or 46 cents per share, a year earlier.