Markets close mixed ahead of Fed meeting
NEW YORK » Stocks barely budged yesterday, ending narrowly mixed after yields on the 30-year Treasury note briefly hit 5 percent and investors grew skittish a day ahead of the Federal Reserve's first meeting of the year.
After a volatile week in which stocks lost ground, merger and acquisition news gave a boost to stocks for much of the session before the 30-year yield moved higher. Merrill Lynch & Co. agreed to acquire wealth manager First Republic Bank for $1.8 billion in cash and stock and Citigroup Inc. struck an agreement to buy British insurer Prudential PLC's Egg Banking PLC online bank for about $1.13 billion.
Many on Wall Street were girding for a busy week of economic and earnings news as they tried to determine whether an indecisive market can resume its advance from the second half of 2006. A two-day Fed meeting begins today, after which investors will receive the central bank's latest read on the economy and interest rates, and a torrent of fourth-quarter earnings reports is due.
'The Fed has left short-term interest rates unchanged at its last four meetings.
"The market really can't find any direction," said Todd Leone, managing director of equity trading at Cowen & Co., describing recent sessions as "rudderless" ahead of the Fed meeting.
He said investors appeared unnerved after the yields on the 30-year Treasury note moved higher.
The Dow Jones industrial average rose 3.76, or 0.03 percent, to 12,490.78.
Broader stock indicators were mixed. The Standard & Poor's 500 index was down 1.56, or 0.11 percent, at 1,420.62, and the Nasdaq composite index was up 5.60, or 0.23 percent, at 2,441.09.
Advancing issues outpaced decliners by about 6 to 5 on the New York Stock Exchange, where volume came to 2.69 billion shares compared with 2.68 billion shares traded Friday.
The Russell 2000 index of smaller companies rose 4.96, or 0.63 percent, to 793.10.
Yields on the 30-year Treasury note hit 5 percent and then slipped back as investors wrestled with questions over the direction of interest rates.
The yield on the benchmark 10-year Treasury note was unchanged at 4.89 percent from late Friday.
The dollar was mixed against other major currencies, while gold prices fell.
Oil fell sharply, though not enough to sends the major indexes higher. Oil settled down $1.48 at $53.94 per barrel on the New York Mercantile Exchange amid concerns OPEC would increase production.
Exxon Mobil Corp. fell 41 cents to $73.20, while ConocoPhillips slipped 12 cents to $64.65.