Markets dip, but end August with gains

NEW YORK – Wall Street ended an aimless session barely lower Thursday after investors shrugged off comments about productivity by Federal Reserve Chairman Ben Bernanke and awaited the government’s August employment report. The major indexes ended August with gains.

With Bernanke saying little to inspire the market in light pre-holiday trading, investors decided against making any major moves in advance of today’s report on nonfarm payrolls. Wall Street is keeping a close eye on the unemployment rate both as an indicator of how quickly the economy is slowing and out of concerns over wage inflation.

There are questions among investors about whether the economy has slowed enough to ward off further interest rate hikes – or whether the Fed’s 17 straight increases since 2004 might have tipped the economy too far. Productivity gains make it easier for the Fed to maintain a stable rate policy.

The Fed chairman, speaking before an economic and development conference in South Carolina, said productivity growth is “likely to continue for some time.” He said recent reports showing a short-term slowing in productivity didn’t change his view.

The Dow Jones industrial average closed modestly lower, down 1.76, or 0.02 percent, at 11,381.15. The Dow showed gains in each of the previous three sessions, and is now at a three-month high. For August over all, the Dow rose 1.8 percent, its best showing since April.

Broader stock indicators also declined Thursday. The Standard & Poor’s 500 index fell 0.45, or 0.03 percent, to 1,303.82, while the Nasdaq composite index dropped 1.98, or 0.09 percent, to 2,183.75. The S&P 500 had its strongest month since January, rising 2.1 percent, while the Nasdaq added 4.4 percent for its best month since November.

In bonds, the yield on the benchmark 10-year Treasury note fell to 4.73 percent from 4.76 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices rose.

Oil prices advanced amid continuing political tensions with Iran over its nuclear program. Crude prices settled up 23 cents to $70.26 a barrel on the New York Mercantile Exchange.

Advancing issues outnumbered decliners nearly 5 to 3 on the New York Stock Exchange, where preliminary consolidated volume came to 2.06 billion shares, compared with 2.08 billion traded Wednesday.

The Russell 2000 index of smaller companies was down 0.05, or 0.01 percent, at 720.53.

Overseas, Japan’s Nikkei stock closed up 1.69 percent. At the close, Britain’s FTSE 100 was down 0.39 percent, Germany’s DAX index dropped 0.14 percent, and France’s CAC-40 was down 0.34 percent.