Stocks post modest gains
Wall Street caught its breath Wednesday after the previous session’s big advance, rising only modestly amid lackluster economic data and a slight drop in oil prices.
Economic data offered little incentive to push stocks higher. The Institute for Supply Management said the services sector of the economy expanded at a slower pace in March than in February.
Still, the market held on to gains earned Tuesday when the Dow Jones industrials and Standard & Poor’s 500 index, riding on some optimism about the housing market, rose to their highest levels since the sharp global pullback in stock prices Feb. 27.
“The data have been somewhat mixed. People are still trying to get a grasp on -- as the Fed interprets this data -- what is it going to do next,” said Nick Raich, director of research at National City Private Client Group, referring to the Federal Reserve’s next move on short-term interest rates.
He said Wall Street’s widely held belief earlier in the year that the economy was headed toward a soft landing had been eroded by concerns about the housing market and the woes of sub-prime mortgage lenders. Better-than-expected housing news Tuesday fed the advance that lifted the Dow 128 points.
On Wednesday, the Dow added 19.75 points, or 0.2%, to 12,530.05.
Among broader indexes, the S&P; 500 inched up 1.60 points, or 0.1%, to 1,439.37, and the Nasdaq composite rose 8.36 points, or 0.3%, to 2,458.69.
Winners edged losers on the New York Stock Exchange, although losers had a slight edge on Nasdaq.
In other trading, the benchmark 10-year Treasury note yield dipped to 4.65% from 4.67% on Tuesday. The dollar was mixed against other major currencies.
Crude oil futures declined 26 cents to $64.38 a barrel in New York.
The Institute for Supply Management’s report showed the group’s index of business activity in the services sector came in at 52.4 in March, down from 54.3 in February. Wall Street had been expecting a reading of 54.7.
Even so, any figure above 50 indicates expansion. March was the 48th straight month of growth in non-manufacturing industries.
Separately, the government said new orders placed with U.S. factories for manufactured goods rose by 1% in February; economists had been expecting an increase of 1.8%.
The government will report on March employment trends on Friday, data that always are closely studied by investors. Stock markets will be closed in observance of Good Friday, but the bond market will be open.
The Fed, which has left short-term interest rates unchanged at its last six meetings after a string of 17 straight increases, has said inflation remains a concern even as the economy slows. That has damped hopes for a rate cut anytime soon.
A weak employment report, however, could revive hopes that the Fed could ease credit.
Among Wednesday’s market highlights:
* Best Buy fell $1.24 to $47.89 after reporting its fiscal fourth-quarter profit rose nearly 19%. Rival Circuit City Stores posted an unexpected loss because of sluggish sales growth -- especially in its flat-panel televisions. Circuit City, the No. 2 electronics chain behind Best Buy, fell 7 cents to $18.21.
* Santa Monica-based Fremont General slumped 62 cents, or nearly 10%, to $5.78, its lowest since 2003. Late Tuesday the lender said its auditing firm, Grant Thornton, had quit. Fremont is among the lenders that have been hurt by rising defaults on sub-prime mortgage loans.
Among other lenders, Countrywide Financial eased 16 cents to $33.37 and IndyMac Bancorp lost 98 cents to $30.75.
* Monster Worldwide plunged the most since August 2003 after the owner of the world’s largest Internet job-listing site said first-quarter sales rose less than forecast because of slowing demand. The shares dropped $6.41, or 13%, to $42.10.
Shares of temporary-staffing firms also fell sharply on the news. Manpower dropped $2.07 to $73; Robert Half slid $2.08 to $35.44.
* Stocks rose to record highs in a number of foreign markets, including Canada, Brazil, Mexico, South Korea and Indonesia.
The Ishares MSCI Emerging Markets exchange-traded fund, which tracks an index of emerging-market shares, gained 89 cents to $119.99, a record high. It is up 5.1% year to date.
