US stocks mixed
Wall Street was mixed today, with blue chips falling and technology stocks managing a slight gain while investors tussled with their concerns about inflation and the overall health of the economy.
Lower oil prices, which have helped drive stock rallies in recent days, remained a bright spot but another drop today was not enough to offset investor concerns about inflation ahead of next week’s Federal Reserve meeting.
Investors grew uneasy after the Labour Department reported import prices rose a larger than expected 0.8% in August.
The Commerce Department said sales rose just 0.2% last month, and although Wall Street had been expecting a decline, some investors worried consumer spending was losing momentum. The modest increase in retail sales followed a 1.4% rise in July.
Today’s relatively quiet session was to be expected after sharp rallies earlier in the week – the gains were actually a little unexpected for some market watchers.
“Everyone knew you couldn’t make money in September,” said Richard Cripps, chief market strategist with Stifel Nicolaus. He contended some investors who regard September as a consistently weak month for the markets and perhaps an indicator of how Wall Street will finish the year have been caught off guard by the recent rally. But today’s decline was quite muted.
Oil prices fell even after the US reported a drop in crude inventories on Wednesday. A barrel of crude fell 75 cents to settle at $63.22 a barrel on the New York Mercantile Exchange.
Natural gas futures for October fell to their lowest level in two years after the Energy Department released figures showing stores of natural gas were much larger than expected.
The Dow Jones industrial average fell 15.93, or 0.14%, to 11,527.39.
Broader stock indicators were mixed. The Standard & Poor’s 500 index was down 1.79, or 0.14%, at 1,316.28 while the Nasdaq composite index gained 1.06, or 0.05%, to end on 2,228.73.
Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.79% from 4.76% on Wednesday. The dollar was up against other major currencies, while gold prices fell.
More economic news came from the Labour Department, which reported that the number of Americans filing claims for unemployment benefits fell to 308,000 last week, down by 5,000 from the previous week. The drop pushed claims to a seven-week low.
A string of strong profit reports this week from investment banks continued as Bear Stearns reported better-than-expected results. Reports from Goldman Sachs Group and Lehman Brothers Holdings helped drive stocks higher in previous days. Bear Stearns was up 3.46 at 139.68. Lehman rose 1.98, or 2.83%, to 72.04, while Goldman rose 1.66 to 162.52.
General Electric said it struck a deal to sell a majority stake in its advanced materials unit to private investment group Apollo Management LP in a deal it valued at 3.8bn (€3bn). The conglomerate said it plans to use expected proceeds of about $2bn (€1.57bn) to restructure its industrial business. GE was down 6 cents at 34.78.
Blue chips came under pressure however after UBS, the investment bank, lowered its rating on GE and Boeing UBS cut its rating on GE to “neutral” from “buy” and reduced its call on Boeing to “reduce” from “neutral.” Boeing was down 1.31 at 75.01.
The Russell 2000 index of smaller companies was down 3.10, or 0.42%, at 727.60.
Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where volume totalled 1.47 billion shares, compared with 1.67 billion traded on Wednesday.
