Stocks End Session Mixed
Conflicting signals on inflation left the stock market mixed Thursday. Blue-chip indexes managed modest gains while smaller stocks fell.
Crude oil prices pulled back from near-record highs, easing some investors’ inflation worries and helping to drive long-term Treasury bond yields lower.
A surprising increase in weekly first-time jobless claims also helped the bond market by raising questions about the economy’s strength.
But the dollar fell to a nine-week low against the euro, boosting concerns about higher prices on imported goods.
In a day of cross currents, some investors turned to blue-chip issues, pushing the Dow Jones industrial average up 45.89 points, or 0.4%, to 10,851.51, the first gain in four sessions.
The broader Standard & Poor’s 500 index was up 2.24 points, or 0.2%, to 1,209.25.
The technology-heavy Nasdaq composite dropped for a third day, however, losing 1.57 points, or 0.1%, to 2,059.72. And the Russell 2,000 index of smaller stocks gave up 0.7% to 626.94, its fourth straight drop.
Losers topped winners by 4 to 3 on the New York Stock Exchange and by 3 to 2 on Nasdaq.
In commodities trading, near-term oil futures in New York settled at $53.54 a barrel, down $1.23, on supply concerns.
U.S. oil inventories last week were 9.7% greater than a year ago, the government said on Wednesday.
Some traders said the oil market’s failure to reach a new high, after the rally that began in early February, could be a sign that prices will come down. The record high closing price is $55.17 a barrel, set in October.
“We tried and failed to hit the record ... which is a bearish signal,” said Bill O’Grady, director of fundamental futures research with A.G. Edwards & Sons Inc. in St. Louis. “It’s scary to say this, but this may be the beginning of a correction.”
The bond market made modest gains after yields surged on Wednesday. The yield on the benchmark 10-year Treasury note fell to 4.47% from Wednesday’s eight-month high of 4.52%.
Among the day’s market highlights:
* The technology sector was under scrutiny as investors looked at news from two major semiconductor firms.
National Semiconductor jumped $1.13 to $21.12 after the company said earnings in its most recent quarter fell 17%, to 21 cents a share. The results were 5 cents better than analysts had expected.
The company also said its gross profit margin rose, and that major customers now have chip inventories “under control” after a surge last year.
Dow component Intel edged a penny higher to $24.85 before its mid-quarter earnings update, released after regular trading ended. The firm had a better-than-expected outlook, raising the mid-point of its revenue forecast and predicting wider profit margins for the quarter.
The stock rose to $25.30 in after-hours trading.
* Advances in shares of Altria Group and General Motors boosted the Dow index.
Altria, the parent of Philip Morris, gained 50 cents to $65.49. Philip Morris, the largest U.S. tobacco firm, won a bid to overturn a ruling that lets California smokers sue as a group over claims that they were misled about risks of “light” cigarettes.
GM rose 53 cents to $34.61. The automaker is adding rebates of $1,000 on the Chevy Suburban sport utility vehicle and other models sitting unsold on dealer lots for more than four months as U.S. sales fell 10% in the first two months of this year.
* Financial shares edged higher from Wednesday’s drop as bond yields eased. Citigroup climbed 27 cents to $48.15. Wachovia, the fourth-biggest U.S. bank, added 36 cents to $52.40. Wells Fargo & Co. rose 47 cents to $60.21.
* Most home builders continued to slide. KB Home fell $1.53 to $115.21 and Pulte lost $1.97 to $73.48.
* Commodity-related stocks, the market’s recent stars, were under pressure. Iron ore miners tumbled on concerns that supplies might rise. Great Northern Iron slumped $12.17 to $127.33; Cleveland-Cliffs sank $2.74 to $70.61.
Energy stocks also were broadly lower. Sunoco slid $2.14 to $99.67 and Berry Petroleum plunged $6.61 to $56.17.
* Delta Air Lines said it would report a substantial loss for 2005 and that its cash flow might not be enough to meet its needs by the end of the year. Delta tumbled 56 cents, or 11.5%, to $4.33 on the news, and dragged other airlines lower.
Continental slid 35 cents to $11.65, AMR, the parent of American, lost 15 cents to $8.97 and Alaska Air declined 52 cents to $29.
* Toys R Us added 62 cents to $23.67 after the Wall Street Journal reported that a private investment group has made a $5-billion proposal to purchase the ailing toy retailer.
* Among initial public offerings, International Securities Exchange cooled after soaring in its debut Wednesday. Shares of the options-exchange operator fell 69 cents to $29.71 on the NYSE. They had rocketed $12.40 on Wednesday.
