US blue chips advance
The stock market’s latest attempt to sustain a rally fizzled out today as doubts about the US economy and corporate profits overtook enthusiasm about stronger-than-expected retail sales and technology sector upgrades.
The Dow Jones industrial average closed up 43.46 at 10,910.44, ending a three-day losing streak but falling back from a 112 point gain earlier in the session.
Broader indicators were weaker. The Nasdaq composite index fell 27.84 to 2,128.79, while the Standard & Poor’s 500 index slipped 0.37 to 1,255.17.
Wall Street has spent much of the week in a holding pattern, moving up and down without making any big commitments.
Many analysts have said investors are looking for a reason to push the markets higher, but the mixed earnings reports, particularly from technology companies, have provided little incentive to buy.
The one potential catalyst on the horizon is still a few days away: the Federal Reserve is expected to cut interest rates for a fifth time this year at its meeting next Tuesday.
Today, the market struggled in choppy trading. A broad cross-section of stocks started the session ahead, but the gains - particularly in technology - did not last.
Morgan Stanley’s upgrade of a handful of semiconductor companies initially boosted the sector, but by the end of the session the momentum had faded.
Applied Materials, as one example, fell 3 cents to dlrs 51.01 after spending most of the day ahead.
Intel was also sluggish, slipping 84 cents to dlrs 29.01. Cisco Systems dropped 30 cents to dlrs 18.83, a day after its inability to predict a turnaround sparked some selling.
Wal-Mart, a Dow component, jumped dlrs 1.83 to dlrs 53.42 after a better-than-expected 6.5% increase in sales at stores open at least a year.
The Gap, which reported a drop in same-store sales, still rose dlrs 3.61 to dlrs 32.41 after the results were better than analysts were predicting.
Despite the struggling US. economy, the Nasdaq is up 30% from its 2001 low, reached April 4 when the index was 1,638.80. The Dow is now up 16% from its lowest close of the year of 9,389.48, reached on March 23, and has been flirting with the 11,000 level it last reached in February.
New US jobless claims data released today by the Labour Department showed a slight dip last week but still remained at a high level, suggesting employers’ demand for workers continues to be weak.
The numbers, which tend to be volatile from week to week, may give the Fed further incentive to keep cutting interest rates.
Advancing issues led decliners 3 to 2 on the New York Stock Exchange. Volume was 1.05 billion, compared with 1.04 billion on Wednesday.
The Russell 2000 index was up 0.40 at 490.58.
Overseas, Japan’s Nikkei stock average slipped 0.5%. European stocks fared better, boosted by a surprise interest rate cut by the European Central Bank. Germany’s DAX index was up 1.7%, Britain’s FT-SE 100 was up 1.2%, and France’s CAC-40 rose 2.1%.
