May 23, 2007 in Business

Stocks flat as investors await results

Associated Press The Spokesman-Review

Currency rates


Wall Street ended an erratic session little changed Tuesday as investors upbeat about the latest round of takeover activity remained hesitant to take the market higher ahead of new economic data.

While stocks moved sideways, Treasury yields rose to a three-month high.

Investors have viewed acquisitions as a sign corporate executives are comfortable with the economy. However, stocks failed to gain much momentum as several deals were announced Tuesday, including billionaire investor Kirk Kerkorian’s plans to buy the Bellagio Hotel & Casino in Las Vegas from MGM Mirage Inc.

“There’s no real drivers out there, and what we’re waiting for is some more economic data,” said Todd Salamone, director of trading at Schaeffer’s Investment Research in Cincinnati. “We’re right around the closing highs of 2000, so there is some hesitancy at those levels for the time being. It is a short term bump in the midst of an ongoing uptrend.”

Further direction might come Thursday, when the Commerce Department reports on durable goods for April. The report could offer insight into the health of consumer spending, which accounts for two-thirds of U.S. economic activity.

With Tuesday bereft of major economic reports, Wall Street was watching talks between U.S. and Chinese government officials about trade and foreign exchange policy. Chinese stocks rose to a fresh record high for the second day in a row Tuesday, as investors there were encouraged by expectations for a stronger yuan and robust housing demand.

The Dow Jones industrials fell 2.93, or 0.02 percent, to 13,539.95.

Broader stock indexes were mixed. The Standard & Poor’s 500 slipped 0.98, or 0.06 percent, to 1,524.12. The index, considered by market professionals as the best indicator of stock performance, passed its record close of 1,527.46 on Monday and again Tuesday for the first time since 2000. However, the S&P remains well below its trading high of 1,552.87, reached in March 2000.

The Nasdaq composite index, which has lagged the other major indexes in recovering from Wall Street’s prolonged slump early in the decade, rose 9.23, or 0.36 percent, to 2,588.02.

The Russell 2000 index of smaller companies set a record close after rising 6.27, or 0.75 percent, to 839.92. The previous record was set May 9. The large-cap Russell 1000 index and broader Russell 3000 indexes also set record closes for the second straight day Tuesday.

Bonds slipped, with the yield on the benchmark 10-year Treasury note rising to 4.82 percent from 4.79 percent late Monday, in part because of a flood of corporate bonds in the market. The dollar was mixed against other major currencies, while gold prices fell.

Stock markets in other countries have also been gaining, particularly in China. The Shanghai Composite Index gained 0.9 percent to 4,110.38, breaking above 4,100 for the first time. The Shenzhen Composite Index climbed 1.4 percent to 1,198.41, also a record high.

The spike in the sometimes volatile Chinese stock markets coincided with high-level talks between the United States and China aimed at lessening economic tensions. Leaders began meeting on Monday for two days of talks to ease conflicts in bilateral trade and an undervalued yuan.

Oil prices backed off their recent run, with a barrel of light sweet crude falling $1.30 to $64.97 on the New York Mercantile Exchange. Prices have been driven higher in part by ongoing concerns that U.S. refiners are not producing enough gasoline to meet peak summer demand.

Advancing issues outpaced decliners by a 9 to 7 margin on the New York Stock Exchange, where consolidated volume came to 2.82 billion shares.

Overseas, Japan’s Nikkei stock average closed up 0.70 percent. At the close, Britain’s FTSE 100 was down 0.46 percent, Germany’s DAX index rose 0.53 percent, and France’s CAC-40 was essentially unchanged.

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