Stocks End Mixed as Investors Await October Jobs Data
Wall Street was virtually dead in the water Wednesday, awaiting Friday’s report on October labor market trends.
Meanwhile, investors in some foreign markets are facing rising central-bank interest rates as the global economy improves -- offering a preview of what some experts believe U.S. markets will face in 2004.
Stocks showed little net change for the day. The Dow Jones industrial average slipped 18 points, or 0.2%, to 9,820.83, while the Nasdaq composite inched up 1.41 points, or 0.1%, to 1,959.37.
The Standard & Poor’s 500 was off 1.44 points, or 0.1%, to 1,051.81.
Winners had a slight edge over losers on the New York Stock Exchange and on Nasdaq.
A government report showing a rebound in orders to U.S. factories in September signaled more improvement in the economy. Likewise, a private group said the services sector grew in October, the seventh straight monthly advance.
Still, many investors are waiting for the government’s October employment report to give a clearer picture of the recovery’s stamina.
“The monthly employment data will either corroborate recent evidence showing the economy is improving, or indicate that [September’s] job gain was an aberration,” said Michael Sheldon, market strategist at Spencer Clarke.
The stock market rallied sharply in October on optimism about the economy. The Dow is up 17.7% this year and the Nasdaq composite is up 46.7%.
Most foreign stock markets also have surged this year. But investors in some major markets now face the prospect of tighter credit as business conditions brighten.
Australia’s central bank Wednesday raised its key short-term interest rate a quarter-point, to 5%, the first increase in 17 months. Australia’s unemployment rate has fallen to the lowest level since 1989.
Today, the Bank of England may raise its benchmark rate. Thirty-eight of 44 economists surveyed by Bloomberg News expect a quarter-point increase, to 3.75%. It would be the first increase in more than three years.
Australia’s S&P;/ASX stock index lost 24 points, or 0.7%, to 3,240.70 on the heels of the rate news.
The U.S. Federal Reserve has pledged to hold its key rate at the current 1% for an extended period, but some experts believe the Fed will be forced to tighten credit in the second half of next year if growth continues.
Treasury bond yields moved up modestly Wednesday, with the 10-year T-note ending at 4.35%, up from 4.30%.
The Treasury said it would sell $57 billion in three-, five- and 10-year notes next week in its so-called quarterly refunding.
In commodity trading, near-term crude oil futures halted their recent decline, soaring $1.55 to $30.30 a barrel in New York after the government said U.S. crude inventories rose less than expected last week.
Among Wednesday’s highlights:
* Priceline.com rattled the Internet sector, plunging $7.59, or 26%, to $21.66 after the firm lowered its outlook for the current quarter because of weak airline ticket sales.
* On the plus side, Cisco Systems gained 22 cents to $21.80 ahead of its earnings report, and jumped to $23.02 in after-hours trading after the report.
* Semiconductor stocks were mostly higher, continuing their recent advance. National Semiconductor rose $1.68 to $44.09 and International Rectifier was up 86 cents to $50.50.
* Many home builders’ shares hit new highs after Standard & Poor’s raised its price targets for a number of the stocks. Lennar surged $3.36 to $94.93, KB Home added $2.17 to $71.74 and Centex jumped $2.23 to $100.53.
But Louisiana-Pacific, a maker of construction paneling, shed $1.30 to $17.80 after brokerage Lehman Bros. lowered its rating on the stock, citing the recent sharp price run-up.
* Southland-based retailer Smart & Final rocketed $1.30 to $9.14. The firm Tuesday reported higher third-quarter operating earnings and said sales have risen sharply since a strike at major supermarkets began.
