Economic Data Fail to Impress Stock Investors

The stock market ended mixed Thursday, with blue chip indexes closing little changed for a second straight session, as a pair of economic reports delivered good and bad news to investors: The growing economy is fueling a job market recovery while also pushing up inflation.

Anxiety over Iraq and interest rates has kept many investors on the sidelines for the last few weeks, and the latest data did little to encourage buying.

Analysts say that until the end of the month, when the Federal Reserve is expected to take action on rates and sovereignty is restored in Iraq, there will be little to drive stocks forward.

“The market’s in a malaise,” said Larry Wachtel, an analyst with Wachovia Securities. “Once we get past the Fed meeting and the transfer of power in Iraq, and we get to second-quarter earnings, at least I’ll have something to hang my hat on. But until then, there’s nothing to spur me into action.”

The Dow Jones industrial average closed down 2.06 points, or 0.02%, at 10,377.52, after slipping 0.85 point Wednesday.

The broader Standard & Poor’s 500 index lost 1.51 points, or 0.1%, to 1,132.05, and the Nasdaq composite index fell 14.56 points, or 0.7%, to 1,983.67.

Still, rising stocks outnumbered losers by 4 to 3 on the New York Stock Exchange. On Nasdaq, losers had a 3-to-2 edge over winners.

In economic news, the government said that fewer people signed up for unemployment benefits last week, suggesting that the labor market continues to improve.

A separate report showed that an index of wholesale prices rose 0.8% in May, exceeding expectations. “Core” wholesale inflation -- excluding food and energy -- was up 0.3%, also higher than expected.

The stronger economy is giving more companies the ability to raise prices, analysts say. Nonetheless, Federal Reserve Chairman Alan Greenspan on Tuesday told Congress that he didn’t believe inflation was becoming a problem.

Greenspan and other Fed officials have sought to assure Wall Street in recent weeks that the central bank plans to raise its key short-term interest rate, now 1%, at a gradual pace to match the stronger economy. The first rate hike is expected June 30.

Treasury bond yields rose early Thursday on the inflation report, then pulled back in afternoon trading. The 10-year T-note yield was as high as 4.75% but ended the day at 4.68%, down from 4.72% on Wednesday.

In other trading, oil prices advanced on concerns that bombings of Iraqi oil pipelines would reduce shipments. Oil for July delivery rose $1.14, or 3.1%, to $38.46 a barrel in New York, the highest close since June 7.

Among Thursday’s market highlights:

* A forecast of lower profit from Jabil Circuit, a maker of electronics for other firms, hurt the tech sector. Jabil sank $3.56, or 13%, to $24.49. Cisco Systems, the top maker of computer-networking gear, shed 52 cents to $23.36. Chip-industry leader Intel fell 49 cents to $27.63.

* Microsoft rose 45 cents, or 1.6%, to $27.77. The firm may announce a plan next month to buy back as much as $100 billion in shares to boost its stock price, Goldman Sachs analyst Rick Sherlund told clients this week.

* Energy stocks rose on higher crude prices, with ChevronTexaco adding 79 cents to $92.78, Amerada Hess rising $2.80 to $74.15 and Valero Energy gaining $1.39 to $69.50.

* Potash soared $7.11 to $92.05. The fertilizer company raised its second-quarter profit forecast.