Stocks Sputter As Investors Shop For Bargains

Stocks struggled to a mixed finish Thursday, weighed down by weakness in the bond market as some surprisingly strong economic readings undermined confidence about steady inflation and interest rates.

But the Nasdaq market and other indexes dominated by smaller and more speculative shares outperformed the blue chips and set new records again as investors continued to shop for bargains in a pricey market.

The Dow Jones industrial average gained 9.61 to 5,635.05 as the past week’s sharp rebound continued to sputter. The barometer of 30 big U.S. companies managed a gain of more than 28 points earlier in the sluggish session, but slid lower as bond prices deteriorated and interest rates rose.

Broader measures dominated by larger companies retreated from modest gains as the yield on the 30-year Treasury bond - a benchmark used to determine the interest charged on many loans - jumped over 6.9 percent.

“Interest rates are still competitive for the stock market and suggest generally that equities are overpriced,” said Michael Metz, vice president at Oppenheimer & Co.

Declining issues outnumbered advancers by about 6 to 5 on the New York Stock Exchange, where volume totaled 389.97 million shares as of 4 p.m., well below Wednesday’s pace.

Some of the stocks that moved substantially or traded heavily Thursday:

NYSE

Hewlett-Packard, down 8-1/2 at 105-1/4.

The computer and printer maker reported a 25 percent improvement in second-quarter earnings, but the profit of $723 million, or $1.37 cents a share, was below analyst forecasts.

Chrysler, up 2-1/4 at 67-1/8.

The automaker announced a 2-for-1 stock split and raised its dividend by 16 percent at its annual shareholders meeting, citing its surprisingly strong first-quarter earnings.

Boeing, up 1 at 82-3/8.

Taiwan’s China Airlines announced an order for eight 747-700 jumbo jets worth $1.4 billion from Boeing.

Xerox, down 1/8 at 153-3/4.

The maker of copiers and other document processing equipment said it will split its common stock three shares for one. The split will occur July 1 for shareholders of record June 17.

NASDAQ

ValuJet, down 7/8 at 13-7/16.

The stock remained under pressure in the aftermath of Saturday’s deadly crash of a ValuJet DC-9 in the Everglades.

Lasertechnics, up 1-5/8 at 3-13/16.

The company’s Sandia Imaging Systems unit and Safeguard Scientifics unveiled a fingerprint reader technology they will use to jointly develop verification systems.