Markets Mixed Amid Caution
Stocks closed mixed in a seesaw session Wednesday as investors weighed weak Midwest manufacturing data and cautious comments about the economy overall from the nation’s top central banker.
Treasury bond yields slumped and so did the dollar.
On Wall Street, the Dow industrials eased 22.90 points, or 0.3%, to 8,480.09. The Standard & Poor’s 500 index lost less than a point, or 0.1%, to 916.92.
The technology-dominated Nasdaq composite ended down 6.99 points, or 0.5%, at 1,464.31.
But advancers beat decliners by about 10 to 7 on the New York Stock Exchange and by 9 to 7 on Nasdaq. Trading was heavy.
Even with the day’s modest declines, the three major stock indexes posted their biggest monthly gains since the fourth quarter of 2002. For April, the Dow jumped 6.1% and the S&P; 500 rose 8.1%, their biggest monthly advances since October 2002, while Nasdaq leaped 9.2%, its biggest monthly gain since November 2002.
In testimony before Congress, Federal Reserve Chairman Alan Greenspan said the U.S. economy seemed poised for a rebound with the end of the war in Iraq, but expressed concern about lingering caution among businesses.
Greenspan’s remarks gave investors only limited comfort as they studied a report showing that manufacturing in the Midwest contracted for a second straight month in April. Yields on Treasury securities declined as some investors bet the Fed may cut interest rates this year.
In recent weeks, better-than-expected first-quarter earnings have fanned optimism about the corporate profit outlook. So far, 395 of the S&P; 500 companies have reported earnings. Roughly 63% have beat analysts’ estimates, 22% have matched estimates and 15% have come up short, according to tracking firm Thomson First Call.
First-quarter earnings of the S&P; 500 companies that have reported have risen an average of 10.3% over the year-ago period, and are expected to increase 12.8% after all the companies have reported.
Jitters about corporate credibility resurfaced on Wednesday after Tyco International said it would take about $1.1 billion in after-tax charges after unearthing fresh accounting problems. Tyco’s shares topped the most actives on the NYSE and rose 23 cents to $15.60.
The tepid economic news pushed the dollar to its lowest level against the euro in more than four years. Weak growth, a rising current-account deficit and low interest rates may extend a 19% drop in the dollar against the euro over the last year, analysts said.
The euro closed at $1.118 in New York, up from $1.107 on Tuesday. It reached $1.119 during the session, the highest value since Feb. 19, 1999.
The dollar had its biggest loss against the yen in a month, falling to 118.89 yen from 119.96 on Tuesday.
Gold rose as the dollar fell, gaining $5.40 an ounce to $339.10 in New York.
In other highlights:
* Dell Computer fell 77 cents to $28.98. EMC, the third-largest maker of computer data-storage machines, slipped 37 cents to $9.09 and rival Network Appliance dropped $1.19 to $13.26. Banc of America Securities analyst Joel Wagonfeld cut Dell to “neutral” from “buy” and lowered EMC and Network Appliance to “sell” from “neutral.” He said their valuations “reflect unrealistic expectations.”
* JDS Uniphase fell 9 cents to $3.23, a day after the fiber optics parts supplier reported a quarterly loss amid continuing weak demand for telecom equipment.
* Duke Energy rose after the power company said its quarterly earnings fell but still managed to beat analysts’ forecasts. Its stock rose 31 cents to $17.59.
* Crude oil futures rose in New York after six straight days of declines, as the Energy Department reported a smaller-than-expected gain in U.S. inventories last week. June futures rose 56 cents a barrel to $25.80.
* Darden Restaurants, the operator of Red Lobster and Olive Garden restaurants, fell $2.26 to $17.51. The company said sales and profit this year would be less than anticipated because April sales trailed expectations.
* Symbol Technologies, the world’s biggest maker of bar-code scanners, lost $1.01 to $10.93. The firm said it would restate five years of results starting with 1998 instead of the four years it previously expected.
Market Roundup, C8-9
