Investors unmoved ahead
of Fed meeting
NEW YORK » Wall Street's fixation with oil prices left stocks little changed yesterday, although investors managed to react stoically to the government's report of a drop in crude inventories.
Oil futures traded above $59 a barrel after the U.S. Department of Energy released data showing inventories of crude fell 1.58 million barrels for the week. The drop, while lower than expected, initially rattled traders and sent stocks sliding; however, they soon recovered most of their lost ground.
"The market is searching for meaning out of the news and isn't ready to forecast where they think oil prices will be," said John Caldwell, chief investment strategist for McDonald Financial Group, part of Cleveland-based KeyCorp. "It's a reactive situation."
A barrel of light crude settled at $58.09, down 95 cents on the New York Mercantile Exchange.
Worries linger on Wall Street that high oil prices could accelerate inflation, as businesses raise their own prices to absorb rising costs. United Airlines, a unit of UAL Corp., said yesterday it was raising fares on most domestic and international flights by 3 percent, effective immediately, because of rising oil prices.
"People are myopically focused on higher energy prices and are ignoring the generally good fundamentals for the U.S. equity market," said Steve Neimeth, a portfolio manager at AIG SunAmerica Asset Management.
Investors nervous about a possible economic slowdown in the United States bid bonds higher worldwide. U.S. Treasuries rose, with the yield on the 10-year note falling to 3.94 percent from 4.05 percent late Tuesday.
The Dow Jones industrial average fell 11.74, or 0.11 percent, to 10,587.93.
Broader stock indicators were up. The Standard & Poor's 500 index was up 0.27, or 0.02 percent, at 1,213.88, and the Nasdaq composite index rose by 0.96, or 0.05 percent, to 2,092.03.
The dollar fell against the euro. Gold prices fell as well.
Stocks have traded in a narrow range for weeks in anticipation of the Federal Reserve Open Market Committee meeting next Wednesday and Thursday. Investors expect the Fed to raise rates for the ninth time since last year at the meeting; what they're waiting for are signs of the Fed's longer term plans for rates.
Ameritrade Holding Corp. said it was rejecting a takeover offer from E-Trade Financial Corp. and would instead acquire rival online brokerage TD Waterhouse from Toronto-Dominion Bank. Ameritrade's stock climbed $3.05 to $17.87.