Wary investors hit pause button

NEW YORK – The stock market’s rally is on hold, and it’s not clear what might restart it.

Stock indicators barely budged this week after last week’s big gains. The Dow closed the week up 36.13, or 0.4 percent, at 8,799.26. The Standard & Poor’s 500 index rose 6.12, or 0.7 percent, to 946.21. The Nasdaq composite index rose 9.38, or 0.5 percent, to 1,858.80.

The continuing crop of better-than-expected economic news has lost its ability to incite the kinds of big gains the market was enjoying back in March, early in a three-month rally that has brought the Standard & Poor’s index up 39.9 percent.

Those kinds of gains might normally take years to occur, so it’s understandable that traders would become wary about hitting the “buy” button. Also, the market’s enthusiasm about the economy has been checked recently by unease about rising interest rates and inflation.

The bond market exercised unusual control over stocks this week as investors worried that the Treasury Department was running low on buyers for U.S. debt. While a successful bond auction Thursday eased some of those concerns, investors are still nervous that Washington might have to entice buyers with higher interest rates.

Besides determining the government’s own borrowing costs, bond yields are also used as a benchmark for consumer loans and can influence how much people borrow to finance big purchases like homes. The 10-year Treasury note, which is closely tied to home mortgage rates, has risen to 3.80 from 3.71 percent in little more than a week.

Rising interest rates are worrisome because they could hamper the economy’s attempts to recover from the recession, which began in December 2007.

Analysts said the market’s pause was a healthful sign after the recent gains.

“We ran at sprinters’ speed and now we’re taking a couple jogs around the track to see if we can sprint again,” said David Darst, chief investment strategist at Morgan Stanley Smith Barney.