FINANCIAL MARKETS : Stocks Mixed; Dollar Up on Germany Talk
The stock market closed mixed for a second straight session Friday, as the July employment report failed to provide a strong sense of which way the U.S. economy is headed.
In other markets, bond yields eased while the dollar resumed its rally against key currencies on rumors about a German interest rate cut.
On Wall Street, the Dow Jones industrial average finished a relatively dull day with a loss of 17.96 points, at 4,683.46. But trading was moderate and winners edged losers by 11 to 10 on the Big Board.
The government reported that the nation’s unemployment rate crept up to 5.7% in July as continued weakness in manufacturing and construction held back the creation of new jobs. Overall the report painted a sluggish picture of the economy.
But it also showed a spurt in wages, which some analysts said may keep the Federal Reserve Board from lowering short-term interest rates further even if growth remains subdued.
Nonetheless, bond yields closed modestly lower. The 30-year Treasury bond yield dipped to 6.90% from 6.92% on Thursday.
Some traders said there was speculation about large bond purchases by Middle Eastern buyers.
A fresh rally in the dollar also may have helped bonds. The dollar rose against most major currencies after comments from a German central bank official fueled expectations for interest rate reductions in that country, perhaps as early as next week.
In New York, the dollar climbed to a four-month high of 91.43 yen, up from 90.50 Thursday, and to 1.397 marks, up from 1.390.
In the stock market, analysts said bargain hunters were picking and choosing but that there was no overall trend.
Among Friday’s highlights:
* Technology stocks were mostly higher, rebounding from steep losses in recent days. The Nasdaq composite index, heavy with tech issues, gained 8.39 points to 991.09.
Tech winners included Sun Microsystems, up 2 1/8 to 47; Microsoft, up 2 3/4 to 93 7/8, and Computer Sciences, up 1 3/8 to 58.
* Some telecom stocks rose as the House approved a telecommunications deregulation bill. Among equipment makers, DSC Communications jumped 2 7/8 to 50 3/8 and General Instrument added 1 1/8 to 35 1/8.
* In the Dow, Disney fell 1 3/8 to 58 as profit taking continued in the wake of the company’s deal to buy Capital Cities/ABC for $19 billion.
In Latin America, the Mexican, Brazilian and Argentine stock markets zoomed on new optimism about the countries’ economies and interest rate trends. Argentina’s Merval index jumped 2.2% to 487.75, a 1995 high.
