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 Some retrenchment was to be expected after stocks had their biggest two-day rally in five years amid growing hopes that the worst of the credit crisis might indeed be over. But Thursday's news was also enough to inject a little bit of uncertainty back into the market.
Sears, parent of its namesake department store chain and Kmart, said profit plunged to a penny per share from $1.27 per share a year ago due to lower sales and clearance markdowns. The results came up far short of Wall Street expectations; analysts polled by Thomson Financial had forecast a profit of 50 cents per share.
Also Thursday, E-Trade Financial Corp. said Chief Executive Mitchell H. Caplan has stepped down, and the troubled online brokerage announced a deal for Citadel Investment Group to provide $2.5 billion in cash to shore up its balance sheet. E-Trade, which holds billions in risky mortgage debt, said it will sell its entire portfolio of asset-backed securities to Citadel for $800 million and book a $2.2 billion charge on the sale.
Meanwhile, oil prices surged after a fire broke out late Wednesday at a pipeline carrying crude oil from Canada to the Midwest. The fire in northern Minnesota killed two workers and resulted in the shutdown of five pipelines, sparking concerns that supplies could be interrupted.
A spokeswoman for owner Enbridge Energy said the company has oil stored along the line and at refineries, the pipelines could be closed for several days without disrupting the flow of supply.
A barrel of light, sweet crude for January delivery jumped $2.35 to $92.96 in premarket trading on the New York Mercantile Exchange, paring its earlier advance of more than $4 a barrel. The sudden gain followed a more than $7 drop over the two previous sessions, which was the second largest two-day price decline since 1983.
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 Dow Jones industrials futures lost 48, or 0.40 percent, to 13,259, while Standard & Poor's 500 index futures fell 6.80, or 0.46 percent, to 1,463.80, and Nasdaq 100 index futures fell 4.25 point, or 0.20 percent, to 2,091.25.
Investors gave the Dow its biggest two-day point gain in five years Tuesday and Wednesday after a Federal Reserve official suggested another interest rate cut could be in store. Wall Street has also been placated by evidence that companies hurt by subprime problems have found financial backers to help stem the damage.
The two-day rebound followed Monday's triple-digit drop in the Dow, which pushed the index to a level 10 percent from its October high
-- the measure of a downward correction. But while the advance was impressive, Wall Street's performance since the summer has been highly erratic, with many triple-digit swings, and there were few if any predictions that stocks were now on a solidly upward path.
Economic growth has been a concern. Investors are awaiting a reading on economic growth in the third quarter. A preliminary estimate of gross domestic product is due at 8:30 EST.
Overseas stock markets were mixed. Britain's FTSE 100 fell 0.35 percent; Germany's DAX index rose 0.16 percent and France's CAC-40 fell 0.11 percent. In Asia, Japan's Nikkei stock average closed up 2.38 percent. Hong Kong's Hang Seng index rose 4.06 percent.
[Associated Press; By LAUREN VILLAGRAN]
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