Stocks mixed in uneasy session
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 were justified.
A surprise warning that cellphone maker Motorola will post a loss for the first quarter also made the market uneasy as it looked ahead to earnings reports that begin arriving next month.
Investors seemed uncertain about where to take stocks a day after the Federal Reserve issued an economic assessment interpreted as opening 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 would 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 Dow rose 13.62 points, or 0.1%, to 12,461.14.
Broader indicators slipped. The Standard & Poor’s 500 index fell 0.5 of a point to 1,434.54. The technology-dominated Nasdaq composite index declined 4.18 points, or 0.2%, to 2,451.74, pulled lower in large part by Motorola’s warning.
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% over the last two months as stockpiles decline ahead of the peak driving season.
Giving investors some relief, though, was the Labor Department’s report that the number of laid-off workers seeking unemployment benefits fell to 316,000 last week, the third consecutive decline -- usually a good sign that consumers are finding work and likely able to keep spending.
Bond yields rose sharply after the job data, pushing the yield on the benchmark 10-year Treasury note to 4.58% from 4.54% on Thursday. The 10-year yield was slightly higher than that of the two-year, which many market participants took as a positive development. Before Wednesday, short-term yields had exceeded long-term yields since August, in a pattern that some say portends a recession.
In other market highlights:
* Technology companies came under pressure after Motorola warned it would swing to a first-quarter loss because of declining sales. The cellphone maker fell $1.24 to $17.50, a level not seen in nearly two years.
Palm fell $1.71 to $17.74 as investors’ speculation diminished that the smart phone and hand-held device maker could be bought by Motorola.
* Barnes & Noble reported a rise in fiscal fourth-quarter results, but the figure missed expectations. Rival Borders Group said it swung to a fourth-quarter loss and announced plans to close nearly half its Waldenbooks stores.
Barnes & Noble fell $1.10 to $37.90 and Borders fell 73 cents to $20.70.
