Markets Mixed on Attack News, AT&T; Forecast
Stocks closed mixed Thursday, with key indexes modestly lower as investors’ enthusiasm flagged in the face of multiple attacks overseas, weak sales of manufactured goods and a lower forecast from AT&T.;
A record reading on new-home sales for May was a bright spot, suggesting continued economic strength. But violence in Iraq and two bomb blasts in Turkey, including one near a hotel where President Bush is expected to stay ahead of Monday’s NATO summit, caused some jitters.
Still, the lack of a deeper slide was encouraging to analysts.
“The bombing in Istanbul certainly raises more risk concern, and that could be what’s keeping us flat today,” said Kevin Caron, market strategist with Ryan, Beck & Co. “Beyond that, there are important fundamental drivers -- a robust profit expansion, companies with record levels of cash balances, creating new jobs -- that provide a solid underpinning to the nation’s economic recovery.”
The Dow Jones industrial average sagged 35.76 points, or 0.3%, to 10,443.81.
Broader gauges were also lower. The Nasdaq composite index was down 5.41 points, or 0.3%, to 2,015.57. The Standard & Poor’s 500 index shed 3.41 points, or 0.3%, to 1,140.65.
But rising stocks narrowly outnumbered losers on the New York Stock Exchange and on Nasdaq.
Wall Street has mostly been in a torpor all month ahead of next week’s Federal Reserve meeting on interest rates and the hand-over of sovereignty in Iraq. A coordinated series of attacks in Iraq on Thursday, mostly directed at security forces, raised further doubts about a smooth transition.
Adding to investors’ uncertainty, the Commerce Department said orders for costly manufactured goods slipped for a second straight month -- a sign that the economic recovery, while strong, remained uneven. Also Thursday, the Labor Department said the number of new people signing up for unemployment benefits rose last week by a seasonally adjusted 13,000 to 349,000.
Neither the jobless claims number nor the durable goods reading matched expectations. Bond yields fell, as did the dollar, and gold hit a two-month high.
“In this environment of low volumes, economic data can have big impact,” said Arnie Holzer, a strategist with Deutsche Asset Management. “And these numbers were not exactly what the market was looking for.”
The yield on the benchmark 10-year Treasury note, which moves inversely to price, fell to 4.65% from 4.70% on Wednesday.
Near-term gold futures shot up $8.10 to $403.10 an ounce. Traders attributed the jump to the violence in the Middle East and to the weak dollar.
Among the day’s highlights:
* Home builders rallied on the Commerce Department report showing new-home sales rising 14.8% in May. But the stocks pulled back from their highs early in the day.
KB Home gained $1.75 to $70.08 after trading as high as $72.05. William Lyon Homes rose $4.60 to $92.20 but had been as high as $93.50.
* AT&T; tumbled $1.60, or 9.8%, to $14.81 after cutting its revenue forecast for the year to a point below its own expectations and those of Wall Street, largely because of a regulatory decision that forced it to pull service from seven states.
* Westlake Village-based United Online, owner of the Juno and NetZero Internet services, fell $3.97 to $16.42 on concern the firm might lose sales to Time Warner’s AOL unit.
* Slot-machine makers got a lift after negotiators reached a deal that would bring thousands of slot machines to Pennsylvania as a way to reduce property taxes. International Game Tech rose $1.44 to $36.70 and WMS Industries gained $1.21 to $27.87.
* In its initial public offering, outdoors outfitter Cabela’s sold 6.25 million shares at $20 each, compared with a range of $15 to $17 indicated by the company. Shares will begin trading today.
