Stocks up slightly after erratic day
NEW YORK – Stocks finished another erratic session modestly higher Wednesday after durable goods and home sales data helped ease investors’ anxiety about whether the Federal Reserve will continue raising interest rates.
A sharp drop in April orders for big-ticket manufactured items drove hopes that the Fed has lifted rates enough to slow a robust economy. And while the Commerce Department also reported an unexpected jump in new home sales last month, overall housing demand continues to fall gradually after five years of record sales.
But recent volatility on Wall Street has shown that investors remain on edge about inflation and the chance of higher lending rates, and any hint of rising prices or accelerating growth has made traders wary of leaving too much money in the market. The major indexes teetered in negative territory for most of the afternoon before a late-day rally lifted stocks from their losses.
Wall Street is trying to recover from two weeks of steep declines, with the Dow Jones industrial falling about 5 percent from a six-year high on May 10. Stocks showed some signs of stabilizing this week but continue to wobble: Worries about the impact of high energy prices triggered a late sell-off Tuesday, erasing an earlier advance.
Still, analysts say the up-and-down trading is likely to continue as bargain hunters take advantage of the recent correction to lock in short-term profits while uncertainty over the economy and interest rates lingers.
At the close, the Dow added 18.97, or 0.17 percent, to 11,117.32, after swinging nearly 70 points in both directions. The Dow is 4.5 percent below a six-year closing high of 11,642.65, reached May 10.
Broader stock indicators turned higher in the last hour of activity. The Standard & Poor’s 500 index rose 1.99, or 0.16 percent, to 1,258.57, and the Nasdaq composite index gained 10.41, or 0.48 percent, to 2,169.17.
In economic news, the Commerce Department said durable goods orders sank 4.8 percent in April, led by plunging demand for computers and aircraft. Economists were predicting a mild 0.5 percent slide after orders surged 6.6 percent in March.
Meanwhile, new home sales grew to about 1.2 million in April from 1.14 million the previous month, topping expectations for sales to decline slightly. Despite the gain, the median price fell 7.3 percent, further evidence that the market is beginning to cool as mortgage rates bounce back from historic lows.
The Russell 2000 index of smaller companies lost 0.03 to 711.26.
Overseas, Japan’s Nikkei stock average jumped 1.97 percent. Britain’s FTSE 100 lost 1.61 percent, Germany’s DAX index fell 1.61 percent and France’s CAC-40 was lower by 1.25 percent.