Investors wait on Middle East news
Wall Street limped to a mixed finish Monday as uncertainty over the situation in the Middle East and a disappointing earnings report from Citigroup gave traders little impetus to buy after last week’s selloff.
With violence in Israel and Lebanon continuing into a sixth day and no resolution in sight, the markets remained wary despite a sharp drop in oil prices. A barrel of light crude settled at $75.30, down $1.73, on the New York Mercantile Exchange.
“Unfortunately, right now this conflict in the Middle East is the elephant in the room, and nothing’s going to happen until there’s a little more clarity there,” said Jack Ablin, chief investment officer at Harris Private Bank. “This is probably a market best viewed from the sidelines.”
The U.S. economy continued to show strength, with industrial production rising 0.8 percent in June, according to the Federal Reserve, far better than the 0.4 percent economists expected. That encouraged investors who had feared the economy would have trouble withstanding high energy prices and higher interest rates.
The Dow Jones industrial average rose 8.01, or 0.07 percent, to 10,747.36. The Dow slid 3.17 percent last week.
Broader stock indicators were narrowly mixed. The Standard & Poor’s 500 index lost 1.71, or 0.14 percent, to 1,234.49, and the Nasdaq composite index climbed 0.37, or 0.02 percent, to 2,037.72.
While the Fed’s overall production data was strong, a report by the New York Federal Reserve showed slower-than-expected manufacturing growth in New York state. The Empire State Index fell to 15.6 in July from 29 in June. Economists expected the index to fall to 20.
Dow industrial Citigroup was another in a line of mildly disappointing earnings reports that have stoked investors’ concerns over stocks in recent weeks. Citigroup just missed Wall Street’s profit forecasts by a penny per share, and its stock fell $1.18 to $46.40.
The news countered a strong sales report from fellow Dow component McDonald’s Inc., which rose $1.68 to $34.72 after posting a 5.9 percent increase in June sales at stores open at least a year.
Declining issues outnumbered advancers by nearly 9 to 7 on the New York Stock Exchange, where preliminary consolidated volume came to 2.24 billion shares, compared with 2.57 billion traded Friday.
The Russell 2000 index of smaller companies was down 3.55, or 0.52 percent, at 677.69.
Overseas, concerns over the Middle East and North Korea’s nuclear program sent Japan’s Nikkei stock average tumbling 1.67 percent. In Europe, Britain’s FTSE 100 closed down 0.12 percent,France’s CAC-40 lost 0.64 percent for the session, and Germany’s DAX index fell 0.1 percent.