Investors continue to fret over prices
NEW YORK » Wall Street remained mired in uncertainty yesterday, ending an erratic session narrowly mixed as investors' inflation worries worsened in the face of a sharp jump in import prices.
Investors found some encouragement after the Energy Department reported an increase in the nation's refining capacity, which had been severely disrupted by hurricanes Katrina and Rita. The nation's crude oil reserves also rose, sending oil prices lower. A barrel of light crude was quoted at $63.08, down $1.04, on the New York Mercantile Exchange.
But the chronic fretting over inflation dominated the markets after the Commerce Department said prices for imported goods rose 2.3 percent in August -- the biggest increase in 15 years, and far greater than the 0.9 percent hike economists had forecast.
"We're definitely at a hard point here, with inflation and interest rates kind of looming over everything," said Bryan Piskorowski, market analyst at Wachovia Securities.
The Dow Jones industrial average fell 0.32, nearly flat, to 10,216.59.
Broader stock indicators were mixed. The Standard & Poor's 500 index lost 0.84, or 0.07 percent, to 1,176.84, and the Nasdaq composite index climbed 9.75, or 0.48 percent, to 2,047.22.
Bonds continued their recent selloff, with the yield on the 10-year Treasury note rising to 4.47 percent from 4.45 percent late Wednesday.
The news on import prices overshadowed a report on the nation's trade deficit, which rose to $59 billion in August, up from $58 billion the month before but less than economists had expected. Much of that increase can be attributed to higher oil prices.
Investors also were disappointed by the latest employment picture from the Labor Department. First-time jobless claims fell to 389,000 last week from 391,000 the week before, but economists had predicted 360,000 claims for the week. Continued fallout from Hurricane Katrina was blamed for the high number of people seeking unemployment benefits.
While the expected raft of corporate earnings reports due next week may not be a panacea for the stock market's troubles, strong fourth quarter profit forecasts could alleviate fears of a falloff in consumer spending heading into the holiday shopping season -- and give stocks a much-needed boost.
Google Inc. fell $3.53 to $297.44 on reports that the Internet company is in talks to acquire a sizable stake in America Online from Time Warner Inc., which rose 10 cents to $17.59.