Investors hit sidelines
ahead of convention

NEW YORK >> A brokerage firm's negative outlook for the semiconductor industry pressured tech shares yesterday, while the broader market was little changed as a jump in jobless claims offset investors' relief over declining oil prices.

Late summer trading is known for being thin, but with the Republican National Convention set for New York next week, Wall Street is even less crowded than usual for late August. And as many traders prepared to take the week off and some money managers planned to reduce staff levels, the market's lack of conviction was reflected in low trading volumes. The drop in oil prices was a bright spot, however, even though analysts weren't sure it would hold.

"A week ago, people were asking where the top in crude is and now they're asking where the bottom is," said Todd Clark, head of listed equity trading at Wells Fargo Securities. "It's a sea change that's welcome for equities, but against the backdrop of a big event next week that will keep players away from the market, it's tough to get too excited."

The Dow Jones industrial average closed down 8.33, or 0.1 percent, at 10,173.41.

The broader gauges were mixed. The Nasdaq composite index shed 7.80, or 0.4 percent, to 1,852.92. The Standard & Poor's 500 index wiggled up 0.13, or 0.01 percent, to 1,105.09.

In economic news, the number of people who signed up for jobless benefits rose last week by a seasonally adjusted 10,000 to 343,000; economists had expected an increase of just 4,000. At least half of those filing new claims were out of work because of Hurricane Charley, the Labor Department said.

Oil prices, which set a new record by topping $49 per barrel last week, have declined over the last five sessions as anxieties about global supply have eased. Yesterday, the Organization of Petroleum Exporting Countries indicated it would discuss ways to push prices down faster, perhaps through increased production, at its meeting next month. Light crude for October delivery settled 37 cents lower at $43.10 a barrel on the New York Mercantile Exchange.

While the market has been fixated on energy costs lately, there were other concerns influencing trading. Investors were awaiting revisions to the government's second quarter gross domestic product report, due today, and remarks from Federal Reserve chief Alan Greenspan at a banking conference in Jackson Hole, Wyo. The Republican convention, which starts Monday, also loomed large.

"The fear index might begin to rise over the next one or two trading days as the convention begins in New York," said Peter Cardillo, chief strategist at S.W. Bach & Co. "Unless the price of oil moves dramatically either way, I kind of think Greenspan, the GDP revision and the Republican convention will take the spotlight. And that will cause us to stay in a very tight, narrow trading range."