Dow hits record while broader indexes mixed
NEW YORK » Wall Street ended an erratic session mixed yesterday with the Dow Jones industrials reaching a third straight record close despite concerns about corporate profits and the impact of falling oil prices.
The market struggled to digest a drop in oil prices, which fell to a 19-month low near $51 a barrel on a report that OPEC leader Saudi Arabia said there may be no need for further production cuts. The statement punished shares of major oil and gasoline companies, though lower energy prices are a boon to consumers.
Investors also tried to reconcile conflicting views about the pace of corporate earnings. The first wave of reports have already shown strength, with Intel Corp., Wells Fargo & Co. and TD Ameritrade Holding Corp. posting robust results. But the market was still uneasy after profit warnings from companies including home builder Centex Corp. and software maker Symantec Corp.
"The markets have had a big run-up, and it is really trying to continue on a positive pace while also alleviating some of the overbought characteristics before earnings really get going," said Scott Fullman, director of investment strategy for Hapoalim Securities USA. "Lower oil has brought back confidence to the consumer, but the Dow has been hurt as it struggles with the drop in big oil companies."
The Dow rose 26.51, or 0.21 percent, to 12,582.59. The index reached a new high of 12,585.08 earlier in the day.
Broader stock indicators were mixed. The Standard & Poor's 500 index was up 1.17, or 0.08 percent, at 1,431.90, and the Nasdaq composite index fell 5.04, or 0.20 percent, to 2,497.78.
Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where volume came to 1.51 billion shares, down from 1.53 billion at the same point on Friday. The Russell 2000 index of smaller companies was down 2.76, or 0.35 percent, to 791.50.
The bond market drew some support from a New York Federal Reserve report that the pace of manufacturing in its region reached its lowest level since the summer of 2005. Bond prices had declined in recent sessions on expectations the U.S. Federal Reserve won't cut rates because of signs of economic strength, but they rose yesterday, with the yield on the benchmark 10-year Treasury note falling to 4.75 percent from 4.78 percent late Friday.
The dollar was mixed against other major currencies, while gold fell.
Oil slumped $1.78 to $51.21 a barrel on the New York Mercantile Exchange, the lowest it's traded since May 2005. The drop in turn sent shares of major oil companies lower. Exxon Mobil Corp. was down $1.03 at $71.63, and ConocoPhillips fell $1.02 to $62.81.