* Citigroup deal on foreclosures
* Wal-Mart sinks on sales, outlook, drags down Dow
* Dow down 0.3 pct; S&P up 0.3 pct; Nasdaq up 1.1 pct
* Obama makes another pitch for stimulus plan
(Adds context to Dow, details on mortgage legislation)
By Chuck Mikolajczak
NEW YORK, Jan 8 (Reuters) - Most U.S stocks rose on
Thursday after news that Citigroup Inc <C.N> agreed to support
legislation aimed at stemming home loan foreclosures,
offsetting Wal-Mart's disappointing sales and outlook.
The Dow fell, however, led down by a 7.5 percent decline in
Wal-Mart as the discounter's sluggish December sales signaled
another downturn in consumer spending, reviving fears of a
prolonged recession.
Citigroup's reported backing of legislation that would
bring relief to struggling borrowers brought on board the
support of one of the largest U.S retail financial institutions
-- seen as a key move in winning support for the bill.
The foreclosure plan "has a long-term positive effect on
the economy. The stock market looks six months out and
something along these lines will help the market," said Tim
Smalls, head of U.S. stock trading at Execution LLC in
Greenwich, Connecticut.
Investors also snapped up some of Wednesday's worst losers,
including Microsoft and Apple, driving the Nasdaq up more than
1 percent.
The Dow Jones industrial average <> was down 27.24
points, or 0.31 percent, to 8,742.46. The Standard & Poor's 500
Index <.SPX> was up 3.08 points, or 0.34 percent, to 909.73.
The Nasdaq Composite Index <> gained 17.95 points, or 1.12
percent, to 1,617.01.
U.S. President-elect Barack Obama made another pitch for a
massive economic stimulus plan, though there was some
nervousness among investors as few new details were added. For
more see [].
But the Nasdaq rose, helped by a 23 percent jump in Sears
Holdings Corp <SHLD.O> after it forecast quarterly profit above
Wall Street estimates, even as its rivals posted disappointing
December sales.
Microsoft <MSFT.O> rose 4.3 percent to $11.36, while Apple
<AAPL.O> climbed 1.9 percent to $92.70.
But shares of Wal-Mart Stores Inc <WMT.N> slid to $51.38,
making it the top drag on the Dow as about $16.3 billion of
market value was wiped from the world's biggest retailer.
Wal-Mart's announcement was yet another bleak sign that
consumer spending, which accounts for about two-thirds of U.S.
economic activity, continues to flounder as households fret
about growing unemployment and shrinking personal savings.
Trading was choppy as the broader market oscillated between
losses and gains throughout the session a day before data that
is expected to show more than half a million U.S. nonfarm jobs
were lost in December and unemployment rose to 7 percent.
The Dow closed at its lowest level since Dec. 30, and is
down 32 percent from 52 weeks ago.
Citigroup added 0.1 percent to $7.16 after lawmakers said
the No. 2 U.S. bank had agreed to support legislation that
would allow bankruptcy courts to erase some mortgage debt to
help bankrupt homeowners better handle their payments.
The Dow Jones Home Builders index <.DJUSHB> rose 4.6
percent on the mortgage news, led by D.R. Horton <DHI.N>, which
added 7.8 percent to $8.16, and Toll Brothers <TOL.N>, up 4.8
percent to $21.68.
With Thursday as the market's fifth session of the new
year, a down day would have fueled anxiety about its ability to
push ahead with a recovery from its Nov. 21 bear market low.
According to the Stock Trader's Almanac, January's first
five days act as an "early warning" on the year's prospects.
The S&P 500 finished Thursday up 0.72 percent, but the Dow
is off 0.39 percent so far on the year.
Volume was light on the New York Stock Exchange, where
about 1.2 billion shares changed hands, below last year's
estimated daily average of 1.49 billion. On the Nasdaq, about
2.01 billion shares traded, also below last year's daily
average of 2.28 billion.
Advancers outnumbered decliners on both the New York Stock
Exchange and Nasdaq by a ratio of about three to two.
(Additional reporting by Deepa Seetharaman; Editing by Leslie
Adler)
