Stocks, Bonds Close Flat; Oil Rises Again
Stocks and bonds closed Thursday’s session mostly unchanged, after trading narrowly in anticipation of May wholesale inflation data due out today.
Elsewhere, the dollar weakened against major currencies amid heightened tensions between the United States and North Korea. Oil prices jumped again on supply worries.
After trading in a 15-point range all day, the Dow Jones industrials closed up 3.69 points at 3,753.14.
In the broader market, declining issues narrowly led advancers by 1,081 to 986 on the New York Stock Exchange, where volume totaled a modest 252.9 million shares.
Bonds also traded in a narrow range as the market moved cautiously ahead of today’s inflation report. The 30-year Treasury bond yield edged down to 7.27% from 7.28% on Wednesday.
Analysts expect that May wholesale inflation rose 0.2%, or 0.3% when volatile food and energy prices are excluded. If the figures come in much higher than expected, meaning that prices are rising too fast, inflation concerns could be reignited on Wall Street.
Still, markets were calm Thursday despite another jump in oil prices. The July futures contract for crude oil in New York rose 33 cents to $18.67 a barrel and is up 92 cents over the past three days.
Analysts blamed increasing concerns about surprisingly short oil inventories in some parts of the country.
Among the stock market highlights:
* Food, beverage and restaurant stocks fell sharply after PepsiCo said its second-quarter earnings will be about even with last year’s $427 million, or 53 cents a share, because of strong price competition in soft drinks and slower restaurant sales. Analysts were looking for a profit increase of about 15%.
PepsiCo dropped as much as 4 5/8 before recovering somewhat to close down 3 at 31 1/2. Archrival Coca-Cola dropped 1 to 40 5/8, even though Coke reiterated earlier statements that its full-year earnings per share will grow “in the upper teens to 20%.”
Other consumer stock losers included McDonald’s, off 1 3/4 to 60 1/8; Snapple Beverage, down 1 3/4 to 24 1/4; and Cott, off 1 1/4 to 18 1/8.
* Drug stocks gained after a Senate panel voted to drop a plan to review new-drug prices as part of health care reform.
Merck rose 1 to 31 3/4, Bristol-Myers Squibb gained 7/8 to 55 5/8, Lilly surged 2 to 57, Pfizer rose 1 1/8 to 63 3/8 and Amgen added 5/8 to 44 1/2.
* Computer stocks, which had tumbled Wednesday on sales concerns, were stable. IBM rose 3/8 to 62 while Apple advanced 7/8 to 27.
Foreign markets were mixed. Stocks posted wholesome gains in Tokyo for the third straight day. The Nikkei 225-share average ended up 140.83 points at 21,402.78.
In Frankfurt, the DAX 30-share average ended 15.88 points lower at 2,129.32, while London’s Financial Times 100-share average fell 9.30 points to 3028.90.
Mexico’s Bolsa index rose 3.38 points to close at 2,413.36.
Worries about North Korea pushed the dollar down to 103.95 yen in New York from 104.02 on Wednesday, and to 1.669 German marks from 1.670.
Market Roundup, D6
