Economic reports keep advance small
NEW YORK – Wall Street caught its breath Wednesday after the previous session’s big advance, rising only slightly amid lackluster economic data and a slight drop in oil prices. Bond prices rose following the economic reports.
Economic data offered little incentive to push stocks higher. The Institute for Supply Management, an organization of corporate purchasing executives, reported that the nation’s service economy expanded at a slower pace in March than in February.
But the market held on to gains earned Tuesday when the Dow Jones industrials and Standard & Poor’s 500, riding some optimism about the housing market, rose to their highest levels since a global pullback Feb. 27.
“The data has been somewhat mixed. People are still trying to get a grasp on – as the Fed interprets this data – what is it going to do next,” said Nick Raich, director of research at National City Private Client Group, referring to the Federal Reserve’s next move on short-term interest rates.
He said Wall Street’s widely held belief earlier in the year that the economy was headed toward a soft landing had been eroded by concerns about the housing market and the well-documented woes of subprime mortgage lenders. Better-than-expected housing news Tuesday fed the advance that lifted the Dow 128 points.
On Wednesday, the Dow rose 19.75, or 0.16 percent, to 12,530.05.
Broader stock indicators made modest gains. The Standard & Poor’s 500 index rose 1.60, or 0.11 percent, to 1,439.37, and the Nasdaq composite index rose 8.36, or 0.34 percent, to 2,458.69.
Bonds rose following the economic reports. The yield on the benchmark 10-year Treasury note fell to 4.65 percent from 4.67 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude settled down 26 cents to $64.38 per barrel on the New York Mercantile Exchange. Oil prices, which had risen since the dispute over Iran’s capture of 15 British sailors and marines unfolded March 23, fell but pared some of their losses after release of inventory data. Weekly Energy Department figures showed a greater-than-expected draw last week of gasoline supplies.
Economic news, which has kept Wall Street’s attention in recent months, yielded little new information Wednesday. Investors have been trying to determine whether the economy can still slow gradually – a so-called soft landing – or whether fissures in the housing sector will place too great a strain on economic growth.