Wall Street got more news Monday that raised concerns about the economy’s health, but bulls took control as the session progressed, and stocks finished mostly higher after sliding Friday. Lower oil prices helped.
With one trading session to go in October, a month that historically has been treacherous for investors is looking like a big winner.
Investors largely shrugged off a lackluster sales report from Wal-Mart Stores. The retail giant’s shares fell $1.20 to $49.53, but many other retail issues rose.
The blue-chip Standard & Poor’s 500 index edged up 0.59 of a point, or less than 0.1%, to 1,377.93.
Most other major indexes also were modestly higher. The Nasdaq composite gained 13.15 points, or 0.6%, to 2,363.77.
Winners topped losers by narrow margins on the New York Stock Exchange and on Nasdaq.
The 30-stock Dow Jones industrial average, which includes Wal-Mart, slipped 3.76 points, or less than 0.1%, to 12,086.50.
The market stabilized after sliding Friday, when the government’s report on third-quarter economic growth came in weaker than expected.
The Dow fell 0.6% on Friday, its biggest one-day drop since Sept. 21.
Wal-Mart added to fears about the economy after it said that sales at stores open at least a year rose 0.5% in October, the smallest monthly increase in more than two years.
But many investors continue to believe that the economy will grow at a decent pace, underpinning corporate earnings, analysts say.
What’s more, bullishness is becoming “a self-fulfilling prophecy,” said Arthur Hogan, chief market analyst at Jefferies & Co.: The market’s strong rally since mid-August is drawing in professional investors as they work to meet their year-end return projections, he said.
The S&P; 500 index was up 3.2% this month through Monday, and 10.4% year to date.
The S&P; had climbed 2.1% in August and 2.5% in September. The gains were fueled by falling oil prices and by the Federal Reserve’s decision to halt its credit-tightening campaign.
Yet U.S. stock mutual funds had net withdrawals in August and September, suggesting that many individual investors were skeptical of the rally.
U.S. stock funds had net outflows of $3.7 billion in August and $3 billion in September, said the Investment Company Institute, the fund industry’s trade group. Total domestic stock fund assets were $4.3 trillion as of Sept. 30.
Individual investors’ skepticism could be a positive for the market, because money now on the sidelines could be drawn in if the rally continues.
A drop in oil prices Monday helped buoy bullish sentiment. Near-term crude futures in New York slumped $2.39 to $58.36 a barrel amid doubts that major oil exporters would push through production cuts.
In the Treasury bond market yields were little changed. The 10-year T-note ended at 4.67%, the same as on Friday. The government said it expected to borrow a net $63 billion in the current quarter, far less than the $104 billion it had estimated in July. The Treasury cited surging tax revenue -- another sign that the economic expansion isn’t in danger of coming to a screeching halt, some experts say.
Among Monday’s market highlights:
* Retail shares were mostly higher despite Wal-Mart. J.C. Penney rose 81 cents to $77.06, Nordstrom jumped $1.52 to $48.35 and Kohl’s gained $1.74 to $73.97.
Target rose 30 cents to $58.86, then jumped to $59.50 after hours, following Berkshire Hathaway’s report that it owned 5.5 million Target shares as of June 30. Berkshire is billionaire Warren Buffett’s investment firm.
* Lockheed Martin jumped $2.42 to $87.03 after brokerage Goldman Sachs raised its near-term rating on the stock to “buy” from “neutral.”
* Energy stocks slid with oil prices. Chevron lost $1.29 to $66.39, Occidental Petroleum fell $1.35 to $46.33 and Hess was down $2.28 to $41.03.
* Some transportation issues rallied as oil fell. Ryder gained $1.42 to $54.77 and Continental Airlines surged $1.49 to $37.80.
* Nasdaq was lifted by a rebound in software issues, many of which had fallen sharply Friday. Oracle rose 42 cents to $18.52 and Autodesk gained 92 cents to $37.13. Microsoft added 19 cents to $28.53 -- its highest closing price in nearly two years.