Stocks Finish Slightly Higher
Stocks ended little changed Monday despite the latest warnings about possible terrorism attacks against major financial institutions.
Other key markets also were mostly flat as many investors seemed to shrug off the threats. Oil, gold and bond yields barely moved.
“You can’t sit and readjust your portfolio for fear of a terrorist attack because there could be one next week or in five years,” Joseph Williams III, who manages the Commerce Growth Fund in Kansas City, Mo., told Bloomberg News.
The Dow Jones industrial average added 39.45 points, or 0.4%, to 10,179.16, its fifth straight advance.
The broader Standard & Poor’s 500 index was up 4.90 points, or 0.4%, to 1,106.62, and the Nasdaq composite index edged up 4.73 points, or 0.3%, to 1,892.09.
Although prices didn’t move much, rising stocks outnumbered losers by 3 to 2 on the New York Stock Exchange. But losers had the edge on Nasdaq. Trading activity was subdued.
The government Sunday raised the terrorism threat level for the financial industry in Washington and northern New Jersey to orange, the second-highest level, while the rest of the country remained at yellow.
New York City has been at the orange terrorism alert level since the Sept. 11 attacks.
The news prompted tighter security at key financial industry sites in New York and elsewhere, and had raised concerns that investors might dump stocks Monday after the market’s dismal performance in July.
But “I like to believe that we’re getting tough enough here in this country that we’re not going to go to pieces when they raise the color,” said Gil Knight, senior portfolio manager at Gartmore Global Investments in West Conshohocken, Pa. “The market by this time should basically have toughened up.”
Stocks slumped last month mainly in response to some weak economic reports. But in recent days fresh data have suggested that business activity is picking up, and the market has stabilized.
On Monday, the Institute for Supply Management said its manufacturing index registered 62.0 last month, up from 61.1 in June, indicating that the manufacturing sector expanded at a respectable rate in July on strong orders and higher production rates.
On Friday a report on consumer confidence showed a rise in July from June levels.
Wall Street also may have gotten a boost Monday from some upbeat second-quarter earnings reports, including from Procter & Gamble, which said quarterly profit soared 44%. P&G;, a Dow index stock, rose $1.19 to $53.34.
In other trading Monday, near-term crude oil futures in New York ended the session at $43.82 a barrel, a record high but up just 2 cents from Friday. Oil prices have surged in recent weeks on worries that supplies from Russia might be interrupted by financial and legal woes at that country’s biggest oil exporter, Yukos.
Near-term gold futures added 70 cents to $391.70 an ounce as the dollar weakened modestly. A weaker dollar usually helps gold.
In the bond market, the yield on the 10-year Treasury note dipped to 4.45% from 4.47% on Friday. The Treasury market may have been helped by the government’s report that it would borrow a net $89 billion in the current quarter, down slightly from the $91 billion it projected in May, analysts said.
In a separate report, the Treasury said foreign investors now own 50% of privately held U.S. government debt, a record.
Among the day’s highlights:
* Citigroup, the world’s biggest bank and one of the potential terrorist targets named in the government’s warning Sunday, fell as low as $43.17 but closed up 23 cents at $44.32.
Among other financial giants, Merrill Lynch eased 7 cents to $49.65 and Prudential Financial lost 46 cents to $46.10, but Bank of America rose 66 cents to $85.67, a record closing high.
* Airline stocks were mostly lower on terrorism concerns. Delta Air Lines lost 13 cents to $5.06 and AMR, parent of American, slid 17 cents to $8.26.
* Novell, a software maker for corporate networks, gained 43 cents to $7.27. Sun Microsystems, which makes server computers, has looked at buying Novell, the Wall Street Journal reported, citing Sun Microsystems President Jonathan Schwartz. Sun added 1 cent to $3.96.
* Upbeat data on the U.S. manufacturing sector may have helped some heavy-industry shares. Briggs & Stratton rose $1.64 to $85.14, Black & Decker jumped $1.39 to $71.30 and Olympic Steel gained $1.17 to $24.69.
* Asian stock markets were weak Monday, but European markets were little changed.
