Mixed picture keeps market volatile
NEW YORK – Stocks finished another volatile session mixed on Thursday after a spike in wholesale prices touched off inflation concerns and partially overshadowed a strong increase in retail sales last month.
Despite the uneven economic news, an upbeat forecast from Honeywell International Inc. propped up the Dow Jones industrial average.
Wall Street, which has this week paid close attention to steps by the Federal Reserve to stoke greater movement in moribund credit markets, again looked to economic data for signals about the health of the economy.
In one unwelcome development, prices at the wholesale level jumped 3.2 percent in November – their biggest increase in 34 years – after a steep rise in wholesale gasoline prices. But the news wasn’t all bad. The Commerce Department said retail sales rose in November by the largest amount in six months, and a Labor Department report showed a drop in new claims filed by those seeking jobless benefits.
The modest movement came as investors further examined the Fed’s agreement with the European Central Bank and the central banks of England, Canada and Switzerland to combat what it described as elevated pressures in the credit markets.
Scott Fullman, director of investment strategy for I. A. Englander & Co. in New York, said investors struggled with the day’s economic readings as well as the Fed’s actions.
“It’s definitely a mixed picture. People are still digesting what came from the Fed. You put this all together and it gives you a healthy dose of volatility,” he said. “I really don’t think anybody is saying ‘I’m very confident to get into this market.’ “
The Dow rose 44.06, or 0.33 percent, to 13,517.96, after being down nearly 120 points at one point in the session.
Broader stock indicators showed smaller moves and finished mixed. The Standard & Poor’s 500 index edged up 1.82, or 0.12 percent, to 1,488.41, while the Nasdaq composite index declined 2.65, or 0.10 percent, to 2,668.49.
The market’s back-and-forth trading has likely kept some uneasy investors out of the market, said Robert Schaeffer, vice president of Becker Capital Management Inc. in Portland, Ore. He pointed to relatively light trading volumes of late as evidence of hesitation by some investors.
The Russell 2000 index of smaller companies fell 2.25, or 0.29 percent, to 769.46.
Concerns about the effectiveness of central banks’ plans to loosen the world’s credit markets weighed on stock markets abroad. Britain’s FTSE 100 fell 2.98 percent, Germany’s DAX index lost 1.83 percent, and France’s CAC-40 fell 2.65 percent. In Asia, Japan’s Nikkei stock average fell 2.48 percent on the day.