Stocks mixed as investors await news
Wall Street finished mixed Thursday, nudging the Dow Jones industrials higher for a fourth straight session but moving cautiously as investors awaited new data to assess whether their hopes for an interest rate cut are justified.
A surprise warning that cell phone maker Motorola Inc. will post a loss for the first quarter also made the market uneasy as it looked ahead to earnings reports that begin next month.
Investors seemed uncertain about where to take stocks a day after the Federal Reserve issued an economic assessment interpreted as opening up the possibility of a reduction in short-term rates. The statement unleashed a wave of buying that boosted the Dow by 159 points Wednesday, but Thursday’s session was erratic, with the Dow weaving in and out of positive territory throughout the day.
Investors remained optimistic about the statement but reined in their buying as they took note of climbing energy costs, which made it look unlikely that inflation will cool enough to provoke a rate cut, and as market experts debated whether the Fed’s slight change in language truly suggested a shift in policy.
“At the end of the day, I don’t think it means a heck of a lot,” said Stephen Massocca, president of Pacific Growth Equities. “The market received it very, very well, but ultimately the Fed is news-dependent.”
Still, falling unemployment claims and strength in markets overseas kept stocks from sinking after this week’s surge. The Dow has had its best four-day point gain since May 2005; whether it continues the streak will depend much on Friday’s report on existing homes sales, inventories and prices for February.
The blue chip index rose 13.62, or 0.11 percent, to 12,461.14.
Broader indicators slipped. The Standard & Poor’s 500 index fell 0.50, or 0.03 percent, to 1,434.54. The technology-dominated Nasdaq composite index declined 4.18, or 0.17 percent, to 2,451.74, pulled lower in large part by Motorola’s warning.
“Surprisingly, the market’s holding on to yesterday’s gains,” said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc. “The market is doing quite nicely — we’re not really giving anything up here. It shows that technically, the market has gained momentum.”
Market watchers aren’t discounting the possibility of further volatility, however, given the potential for Friday’s housing data to move the markets and as oil prices continue to rise, reminding investors that inflation is still high and that Americans may need to cut back on discretionary spending.
On Thursday, oil prices climbed more than $2 to $61.69 a barrel on the New York Mercantile Exchange. U.S. retail gasoline prices have surged about 20 percent over the past two months as stockpiles decline ahead of the peak driving season.
The Russell 2000 index of smaller companies was up 0.58, or 0.07 percent, at 808.05.
Advancing issues narrowly outnumbered decliners on the New York Stock Exchange, where volume came to 1.62 billion shares, compared to 1.63 billion Wednesday. Overseas, Japan’s Nikkei stock average rose 1.49 percent. Britain’s FTSE 100 was up 0.98 percent, Germany’s DAX index was up 2.16 percent, and France’s CAC-40 was up 1.75 percent.