FINANCIAL MARKETS : Dow Slips 1.01 in Wait-and-See Stock Session
The Treasuries market was lifted for a second day Thursday as traders interpreted Federal Reserve Board Chairman Alan Greenspan’s testimony as bullish news for bonds.
Stocks finished slightly lower as investors turned cautious ahead of today’s report on fourth-quarter gross domestic product, which could determine whether the Fed raises interest rates once again.
Greenspan’s remarks further raised fixed-income investors’ hope that the Fed may be nearing the end of a yearlong campaign to head off inflation by raising interest rates.
At the close, the Treasury’s bellwether 30-year bond yield was 7.83%, down from Wednesday’s 7.87%. Its price, which moves in the opposite direction, advanced 13/32 point, or $4.06 per $1,000 in face amount.
On Wall Street, the Dow Jones industrial average ended off 1.01 points at 3,870.44. The Dow had fallen 17 points before trimming its losses.
Investors were shy about making any big commitment before the gross domestic product data is released and next week’s policy meeting of the Fed.
In the broader market, advancing issues were in a virtual dead heat with declining ones on the New York Stock Exchange, with 1,112 stocks up, 1,032 down and 785 unchanged. Big Board volume declined to 311.99 million shares from 342.30 million shares traded Wednesday.
Broad market indexes were narrowly mixed.
Data released before the beginning of trading was mixed. The Commerce Department said orders to U.S. factories for durable goods jumped 13.9% last year, capped by a 1.4% advance in December. Economists had expected to see a rise of about 0.5% for December.
The Labor Department said the number of new claims for unemployment benefits fell by 13,000 last week from the week before--about even with expectations.
Among the market highlights:
* Leading the Dow 30 components lower was General Motors, down 1 3/8 at 37 3/4.
The Big Three auto stocks fell after a Wall Street Journal report suggested that demand for new vehicles may taper off soon. Chrysler was down 1 1/2 to 45; Ford fell 3/4 to 25 3/8.
* Among other Dow components, Alcoa Aluminum fell 1 1/4 to 84 1/2 and DuPont dropped 1 1/8 to 56.
* McDonald’s fourth-quarter profit exceeded analysts’ estimates, and its stock rose 1 to 30 3/4.
* Hillhaven rose 3 3/8 to 26 1/4 after Horizon Healthcare Corp. made a $28-a-share merger offer for the company.
* Apple Computer slid 1 31/64 to 39 1/2 as computer stocks took a drubbing for the second time this week after some disappointing earnings reports.
* Airline stocks sank and pulled down the Dow transportation average after Southwest Airlines announced that its fourth-quarter profit had declined by nearly half. Although Southwest managed to add 1/8 to close at 18 7/8, the Dow transports fell 12.92 points, or 0.85%, to close at 1,510.46.
* Dr Pepper/Seven-Up climbed 2 to 32 1/2 after Cadbury Schweppes said it was making a $1.71-billion tender offer for Dr Pepper at $33 a share.
* Affymax, a Dutch pharmaceutical research company, soared 11 1/2 to 29 1/2 after British drug maker Glaxo agreed to pay $485 million, or $30 a share, for the company.
Overseas markets were mixed. The London FTSE-100 average rose 25.1 points to 3,007.3.
In Germany, Frankfurt’s DAX average closed 3.85 points higher at 2,030.69. Mexico’s Bolsa fell 37.98 points, or 1.85%, to 2018.61.
In Tokyo, the 225-share Nikkei average fell 88.64 points to 18,070.84. In Hong Kong, the Hang Seng index rose 69.81 points to 7,310.53.