Wall Street turns around for tiny gain
NEW YORK – Wall Street managed a razor-thin gain Thursday as investors sifted through data that pointed to stable interest rates but also suggested the economy has moderated more than expected.
The market was down for much of the day after reports of sluggish home sales and durable goods orders, but stocks then turned higher at mid-afternoon. Investors have been struggling to rebound after losses this week on concerns the Federal Reserve’s campaign of rate hikes has hurt the economy and that a soft landing might be harder to achieve.
The data bolstered views the Fed will remain on the sidelines for the time being. However, slowing economic indicators also mean consumer spending is softening – a key factor that drives the economy and corporate earnings.
“Looking beyond just the numbers the trend is obviously toward slowing housing demand,” said Elisabeth Denison, a U.S. economist with the securities firm Dresdner Kleinwort.
The Commerce Department reported sales of new homes fell 4.3 percent in July, the biggest drop since February. The report came one day after the National Association of Realtors reported sales of previously owned homes had a bigger than expected decline, prompting a market selloff.
Meanwhile, the department said orders to U.S. factories for big-ticket manufactured goods fell 2.4 percent in July as demand for aircraft and automobiles weakened. And the Labor Department said the number of Americans filing claims for unemployment benefits last week slipped by 1,000 to 313,000.
The Dow Jones industrial average picked up 6.56, or 0.06 percent, to 11,304.46.
Broader stock indicators were narrowly higher. The Standard & Poor’s 500 index added 3.07, or 0.24 percent, to 1,296.06, and the Nasdaq composite index rose 2.45, or 0.11 percent, to 2,137.11.
Bonds were flat, with the yield on the benchmark 10-year Treasury note at 4.80 percent, down from 4.81 percent Wednesday. The dollar was mixed against other major currencies, while gold prices fell.
Oil prices rose, with light sweet crude for October delivery up 60 cents at $72.36 a barrel on the New York Mercantile Exchange. Crude has been affected this week by continued uncertainty in the Middle East, and government data Wednesday that showed rising supplies of gasoline as refiners increased output.
Advancing shares barely outnumbered decliners on the New York Stock Exchange, where volume came to 1.26 billion shares, compared to 2.02 billion traded at the same point Wednesday.
The Russell 2000 index of smaller companies rose 0.30, or 0.04 percent, to 698.72.
Overseas, Japan’s Nikkei stock average closed up 1.25 percent. At the close, Britain’s FTSE 100 was up 0.16 percent, Germany’s DAX index added 0.67 percent, and France’s CAC-40 rose 0.59 percent.
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