Stocks Move Little in Listless Session
Stocks ended a listless session little changed Monday as cautious investors found few reasons to put money into the market.
The aimless trading followed steep losses late last week, with Wall Street uneasy about the possibility of more interest rate hikes from the Federal Reserve. On Friday, upbeat January employment data fueled worries about economic strength, another reason for the Fed to continue tightening credit.
Art Hogan, chief market strategist for Jefferies & Co., said fresh data on unemployment benefit claims later this week should draw a reaction from traders as they try to decipher the Fed’s stance on inflation and the pace of domestic employment growth. For now, however, Wall Street will be idle without much news to drive it, he said.
“I think we’re going through this natural vacuum in the news cycle where we have a quiet economic calendar and the fourth-quarter earnings reports are slowing down,” Hogan said. “It’s difficult to generate any interest in the market.”
The Dow rose 4.65 points, or 0.04%, to 10,798.27. The index lost 113 points last week after gaining 240 points the week before.
Broader stock indicators were mixed. The Standard & Poor’s 500 added 0.99 point, or 0.1%, to 1,265.02, and the Nasdaq composite fell 3.78 points, or 0.2%, to 2,258.80.
The Russell 2000 index of smaller companies gained 3.67 points, or 0.5%, to 727.89.
Advancing issues led decliners by 19 to 14 on the New York Stock Exchange.
U.S. Treasury bond yields rose as the government prepared to borrow $48 billion this week via longer-term bonds. The sales begin today with the auction of three-year notes.
The yield on the benchmark 10-year T-note rose to 4.55% from 4.52% on Friday.
News that Iran has stopped cooperating with U.N. officials over its nuclear arms program sparked fears about disruptions from one of the world’s biggest oil suppliers and drove oil futures above $66 early in the session. However, a barrel of light crude slid 26 cents to settle at $65.11 in New York trading.
“This Iranian issue is lurking as tension in the background,” said James Awad, who manages $1.3 billion as chairman of Awad Asset Management in New York. “It’s going to keep oil higher until it works its way out.”
Transocean, the world’s largest offshore oil and natural-gas drilling contractor, jumped $3.31 to a record $83.93. The company said it had won contracts for five rigs from India’s Oil & Natural Gas valued at $805 million over three years.
Valero Energy, the biggest U.S. refiner, rose 87 cents to $59.50. Chevron added $1.34 to $58.84.
In other market highlights:
* A gauge of retailers declined 0.5% on concerns that higher energy prices would cut into consumer spending. Wal-Mart Stores retreated 41 cents to $45.08. Nordstrom, the upscale department-store chain, fell 85 cents to $41.35. A University of Michigan survey released Friday showed an unexpected decline in consumer confidence.
* U.S. Steel and Alcoa helped push a gauge of raw-material stocks up 1.7% for the biggest advance among 10 industry groups in the S&P; 500.
U.S. Steel surged $3.65 to $61.57. Arcelor is considering a takeover of the company to counter a $22.3-billion hostile bid by Mittal Steel, a German newspaper reported, citing unidentified bankers. Taking over U.S. Steel would increase Arcelor’s debt and make it a less attractive target for Mittal, the newspaper said. Arcelor and U.S. Steel declined to comment.
Other steel issues also soared. Nucor gained $5.18 to $87.81; Steel Dynamics rose $3.24 to $47.80.
Aluminum maker Alcoa advanced $1.45 to $32.03. The stock was raised to “overweight” from “neutral” by JPMorgan Chase & Co. “The market seems to be ignoring the strong aluminum price and the impact it will have on Alcoa’s earnings and cash flow in 2006,” JP Morgan said.
* Highway spending in the new federal budget would rise to $39.1 billion from $36 billion in the current year, an 8.5% increase. Vulcan Materials, which makes gravel and other building products, climbed $5.92, or 8%, to $80.42 for the best performance in the S&P; 500.
* Apple Computer fell $4.55, or 6.3%, to $67.30 for the steepest loss in the S&P; 500 on concern customers may hold off buying new Macintosh personal computers until software developers rewrite the programs to work with Intel chips, a Piper Jaffray analyst said. Since Jan. 13 the stock has slumped 21%.
* Micron Technology jumped $1.12 to $16.01 after shares of the computer memory chip maker were raised to “buy” from “hold” at Citigroup Inc.
* Retailer Talbots said it was buying women’s clothing designer J. Jill Group Inc. for about $517 million in cash, trumping an earlier bid from Liz Claiborne. J. Jill surged $4.37 to $23.57, while Talbots dropped 93 cents to $26.34 and Liz Claiborne fell 5 cents to $34.27.
* Some healthcare issues fell on concerns about proposed Medicare spending cuts. UnitedHealth slid $1.08 to $58.54; Lincare Holdings lost 87 cents to $40.53.
