Stocks up, but retailers slip on poor outlook

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NEW YORK (CNNMoney)

But the gains were slim as investors parsed through lackluster earnings from retailers and tried to make sense of the latest signals from the Federal Reserve about its bond-buying program.

The Dow, S&P 500 and Nasdaq rose modestly in morning trading.

Target (TGT, Fortune 500) shares slumped after the discount retailer reported lower-than-expected comparable same-store sales for the third quarter. Target blamed "an environment where consumer spending remains constrained" for the weakness, a troubling sign ahead of the key holiday shopping period. Target also trimmed its profit forecast for the year.

Dollar Tree (DLTR, Fortune 500) shares also took a tumble after the discount retailer's earnings missed expectations. The company also lowered its guidance for the year.

Abercrombie & Fitch (ANF) posted a quarterly loss and CEO Mike Jeffries said he expects weakness in revenue to continue into the fourth quarter. And Sears Holdings (SHLD, Fortune 500) reported a deepening loss on poor sales. But both of those stocks were higher in late morning trading despite dropping at the open.

Still, there was some good corporate news. Shares of Green Mountain Coffee Roasters (GMCR) soared following quarterly earnings that beat market expectations. The company also boosted its stock buyback and announced that it will begin to pay a dividend.

Related: Fear & Greed Index still shows greed

The Fed also remained in focus Thursday. Stocks finished lower Wednesday after minutes from the latest Fed meeting revealed that officials may start winding down their stimulus program for reasons other than an improving job market.

As investors bet that the Fed may move to cut back on, or taper, its bond buying program sooner rather than later, they moved away from Treasuries, pushing the 10-year yield to 2.83%. When investors started to worry in the late spring that the Fed could taper at its September meeting, the 10-year yield rose from 1.6% in May to almost 3% in just a few months.

Meanwhile, the Senate Banking Committee approved Janet Yellen's nomination to become the first woman to lead the Federal Reserve Thursday morning. Yellen is the current vice chair of the Fed, has been nominated to chair the Fed after Ben Bernanke's term ends in early 2014. Her nomination now moves to the full Senate for a vote.

Related: America's 'manly' jobs aren't coming back

European markets were lower in afternoon trading. The CAC 40 in Paris slipped after new data showed a contraction in French private sector output in November.

Chinese manufacturing stumbled for the first time in four months, according to HSBC's "flash" measure, which helped send Hong Kong and Shanghai's indexes lower.

But Japan's Nikkei surged almost 2% as the Bank of Japan expressed optimism about the country's recovery and said it would make no changes to its stimulus program.

First Published: November 21, 2013: 9:51 AM ET

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