Investors are growing uneasy about inflation
NEW YORK » Wall Street closed mixed yesterday, 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 that have helped drive stock rallies in recent days remained a bright spot, but another drop in crude yesterday wasn't enough to offset investor concerns about inflation ahead of next week's Federal Reserve meeting. Investors grew uneasy yesterday after the Labor Department reported import prices rose a larger than expected 0.8 percent in August.
The Commerce Department said sales rose an anemic 0.2 percent last month, and although Wall Street expected a decline, some investors worried that consumer spending was losing momentum. The modest increase in retail sales followed a 1.4 percent rise in July.
Yesterday's relatively quiet session wasn't a surprise 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 E. Cripps, chief market strategist with Stifel Nicolaus. He contends 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 Thursday's decline was quite muted.
Oil prices fell even after the United States 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.
The Dow Jones industrial average fell 15.93, or 0.14 percent, to 11,527.39.
Broader stock indicators were mixed. The Standard & Poor's 500 index was down 1.79, or 0.14 percent, to 1,316.28 while the technology-heavy Nasdaq composite index gained 1.06, or 0.05 percent, to 2,228.73.
Bonds fell, with the yield on the benchmark 10-year Treasury note rising to 4.79 percent from 4.76 percent late Wednesday. The dollar was up against other major currencies, while gold prices fell.
More economic news came from the Labor 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.
After the stock market rose amid a paucity of economic numbers earlier in the week, investors have been eager to get their hands on a few key pieces of data.