Stocks End Day Mixed as Oil Prices Increase
Stocks staggered to a mixed finish Wednesday as lower-than-expected manufacturing activity and a rebound in oil prices chilled an early spate of bargain hunting, but technology shares posted a modest advance.
Adding an element of gloom to a market already made sluggish by lackluster trading, oil prices rose for only the second time in nine sessions.
Near-term crude futures in New York surged $1.88 to $44 a barrel after government data showed a steep drop in U.S. oil inventories last week, as imports fell and refiners continued to operate at unusually high rates.
Underscoring how exaggerated market moves can be when volume is light, major stock indexes fell suddenly at midday on reports of a possible terror attack in Washington.
The market quickly recovered after it became clear the incident stemmed from the accidental release of pepper spray in a restaurant near the World Bank and the International Monetary Fund. Still, share prices traded flat, at best, the rest of the day.
“When you combine the rise in oil prices with the false-alarm bioterrorist alert, both of those events really took the steam out of the market,” said Michael Sheldon, chief market strategist at Spencer Clarke.
The Dow Jones industrial average closed down 5.46 points, essentially flat, at 10,168.46.
Among broader indexes, the Standard & Poor’s 500 index rose 1.67 points, or 0.2%, to 1,105.91. The tech-focused Nasdaq composite index gained 12.31 points, or 0.7%, to 1,850.41.
Advancing issues outnumbered decliners by more than 3 to 2 on the New York Stock Exchange.
With relatively few traders on Wall Street because of the Republican National Convention in New York and the upcoming Labor Day holiday, the markets were slow to react to the Institute for Supply Management’s manufacturing index for August. Manufacturing activity rose for the 15th consecutive month, but the pace slowed from July.
Many market participants were looking ahead to Friday, when the Labor Department is expected to release employment data for August. After two months of anemic job growth, Wall Street is hoping for a big number.
“The market really needs to see some positive economic statistics, and we haven’t been getting them lately,” said Brian Williamson, an equity trader at Boston Co. Asset Management. “The next few days are going to be critical to see where we stand and to see whether or not we’re in an economic soft patch ... or if we’re in a slump.”
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In other market highlights:
* Yields on U.S. Treasuries held steady after sliding a day earlier on news of sluggish economic growth. The yield on the benchmark 10-year T-note edged up to 4.12% from 4.11%.
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* Insurance stocks fell after an analyst at brokerage firm UBS said Hurricane Frances, now headed for Florida, might be more costly for the industry than 1992’s Hurricane Andrew.
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American International fell $1.03 to $70.21, Allstate lost $1.04 to $46.17, Chubb dropped 67 cents to $67.34, St. Paul Travelers shed 70 cents to $33.99 and Ace declined $1.03 to $37.52.
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* An index of oil and gas companies rose 1.3%, for the biggest gain among the S&P; 500’s 24 industry groups, on the jump in crude prices. ChevronTexaco of San Ramon, Calif., climbed $1.17 to $98.67, a 52-week high, and Burlington Resources jumped $1.25 to $37.48.
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* Shares of Santa Monica-based online postage company Stamps.com soared $1.21 to $16.13 after regulatory filings in the last two days revealed that director Kevin Douglas has bought 100,000 shares.
The stock, which has rocketed from $9.11 on Aug. 6, also could be getting a boost from a “short squeeze” -- meaning that traders who had borrowed shares and sold them, betting on a decline, were rushing to buy the stock to close out their bets.
The number of Stamps.com shares sold short rose 90% from mid-July to mid-August, to 815,000 shares, according to Nasdaq data.
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* General Motors and Ford Motor eased after the companies said production cuts could dent fourth-quarter profits. GM lost 10 cents to $41.21 and Ford declined 21 cents to $13.90.
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* Intel added 14 cents to $21.43. The chip maker’s anxiously awaited mid-quarter sales report will be released today.
