S&P toys with record as market hesitates

NEW YORK » Wall Street ended an erratic session little changed yesterday as investors upbeat about the latest round of takeover activity remained hesitant to take the market higher ahead of new economic data.

While stocks moved sideways, Treasury yields rose to a three-month high.

Investors have viewed acquisitions as a sign corporate executives are comfortable with the economy. However, stocks failed to gain much momentum as several deals were announced yesterday, including billionaire investor Kirk Kerkorian's plans to buy the Bellagio Hotel & Casino from MGM Mirage Inc.

"There's no real drivers out there, and what we're waiting for is some more economic data," said Todd Salamone, director of trading at Schaeffer's Investment Research in Cincinnati. "We're right around the closing highs of 2000, so there is some hesitancy at those levels for the time being. It is a short term bump in the midst of an ongoing uptrend."

Further direction might come tomorrow, when the U.S. Commerce Department reports on durable goods for April. The report could offer insight into the health of consumer spending, which accounts for two-thirds of U.S. economic activity.

The Dow Jones industrials fell 2.93, or 0.02 percent, to 13,539.95.

Broader stock indexes were mixed. The Standard & Poor's 500 slipped 0.98, or 0.06 percent, to 1,524.12. The index, considered by market professionals as the best indicator of stock performance, passed its record close of 1,527.46 on Monday and again yesterday for the first time since 2000. However, the S&P remains well below its trading high of 1,552.87, reached in March 2000.

The Nasdaq composite index rose 9.23, or 0.36 percent, to 2,588.02.

The Russell 2000 index of smaller companies set a record close after rising 6.27, or 0.75 percent, to 839.92. The previous record was set May 9. The large-cap Russell 1000 index and broader Russell 3000 indexes also set record closes for the second-straight day yesterday.

Bonds slipped, with the yield on the benchmark 10-year Treasury note rising to 4.82 percent from 4.79 percent late Monday, in part because of a flood of corporate bonds in the market. The dollar was mixed against other major currencies, while gold prices fell.

Advancing issues outpaced decliners by a 9 to 7 margin on the New York Stock Exchange, where volume came to 1.48 billion shares.

Oil prices backed off their recent run, with a barrel of light sweet crude falling $1.30 to $64.97 on the New York Mercantile Exchange.

Wall Street was watching talks between U.S. and Chinese government officials about trade and foreign exchange policy.

Chinese stocks rose to a fresh record high for the second day in a row yesterday, as investors there were encouraged by expectations for a stronger yuan and robust housing demand.

The Shanghai Composite Index gained 0.9 percent to 4,110.38, breaking above 4,100 for the first time. The Shenzhen Composite Index climbed 1.4 percent to 1,198.41, also a record high.

In corporate news, MGM Mirage surged $17.03, or 27 percent, to $79.98. Kerkorian said he expects to pursue "financial restructuring transactions" for the casino. His investment vehicle, Tracinda Corp., owns a 56 percent stake in MGM Mirage.