Iran, oil jitters dent Dow
Wall Street turned in a mixed performance Thursday as Iran’s refusal to suspend uranium enrichment rattled investors and tempered a tech rally spurred by a strong outlook from chip maker Analog Devices.
Investors were uneasy after a United Nations official said Iran did not agree to Security Council demands to suspend its nuclear program. Also hurting stocks was a U.S. government report that showed a larger-than-expected drop in gasoline and heating oil inventories, causing crude prices to bound above $60 a barrel.
This chilled the mood among investors who at first were encouraged by upbeat corporate announcements and a rally in foreign stock markets. Strength among semiconductor stocks drove the Nasdaq composite index to six-year highs.
Analog Devices, which gave an optimistic outlook about business conditions, drove chip stocks. Investors were also encouraged about takeover activity as Whole Foods Market said late Wednesday that it would buy rival Wild Oats Markets in a $565-million deal.
“With the lack of real market-moving news, traders are taking a look at the Iran thing and the technical breakdowns and we’re seeing a little bit of a pause on that,” said Jody Giraldo, vice president of equities at vFinance.
The Dow Jones industrial average fell 52.39 points, or 0.41%, to 12,686.02. Broader stock indicators were mixed. The Standard & Poor’s 500 index was down 1.25 points, or 0.09%, at 1,456.38. The Nasdaq rose 6.52 points, or 0.26%, to 2,524.94. The tech-dominated index is at a six-year high and finished above the 2,524.31 halfway mark of its all-time high of 5,048.62 set March 10, 2000.
Overseas, Japan’s Nikkei stock average closed up 1.09%, making its first foray above 18,000 in nearly seven years. Investors were cheered by the Bank of Japan’s decision to raise interest rates, indicating the central bank’s confidence in the long-flagging Japanese economy. At the close, Britain’s FTSE 100 was up 0.37%, Germany’s DAX index was up 0.46% and France’s CAC-40 was up 0.23%.
The aftermath of Wednesday’s stronger-than-expected consumer inflation figures from the government sent bond yields higher for the second day. The yield on the benchmark 10-year Treasury note rose to 4.73% from 4.69% on Wednesday. The dollar was mixed against other major currencies. Gold futures stabilized, slipping 80 cents an ounce to $679.40 after soaring $23.10 on Wednesday.
Oil rose in an erratic session after the Energy Department reported increased demand for crude-based products. A barrel of light sweet crude rose to a seven-week high, up 88 cents at $60.95 on the New York Mercantile Exchange.
The market had little reaction to a Labor Department report that said fewer Americans applied for unemployment benefits last week after filings jumped in the previous week by the most since 2005. Jobless claims fell to 332,000.
Ryan Larson, senior equity trader at Voyageur Asset Management, a division of RBC Dain Rauscher, said technology stocks were providing the most lift to the markets.
In other highlights:
* Apple rose 31 cents to $89.51 after making a deal with Cisco Systems that allows it to use the iPhone name for its upcoming mobile telephone that enables users to play music. Cisco rose 2 cents to $27.40.
* Analog Devices said the trends in some of its business segments were improving. Its shares surged $3.48, or 10.4%, to $36.80.
* Google made a direct challenge to Microsoft’s Office brand of business software, unveiling its own suite of Web-based products for word processing, e-mail, spreadsheets and other programs. Google fell 1 cent to $475.85, while Microsoft rose 4 cents to $29.39.
* Whole Foods jumped $6.41, or 14%, to $52.11 after it backed its forecast for same-store sales growth of 6% to 8% in fiscal 2007. The company received a number of analyst upgrades after its announcement that it intended to acquire Wild Oats.
Wild Oats shares rose $2.69, or 17.1%, to $18.41.
