Weak GDP data cools enthusiasm
NEW YORK » Stocks finished largely flat yesterday after a weak reading of the nation's gross domestic product muted Wall Street's enthusiasm over a new spate of acquisitions.
Technology stocks fared better than most, however.
The U.S. Commerce Department's latest estimate of first-quarter GDP was 0.6 percent, lower than the average economist estimate of 0.8 percent and the 1.3 percent the government projected in April.
The fact that first-quarter growth has been the most sluggish since the last quarter of 2002, but that the Dow Jones industrial average has nonetheless surged more than 9 percent this year, made some investors pause.
"There's friction between those two numbers. That's why investors are a little bit worried, and why we're not hitting home runs every day," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors.
Yesterday, banking company Wachovia Corp. said it would acquire A.G. Edwards Inc. for $6.8 billion in cash and stock to form the second-largest retail stock brokerage in the country. And payroll processor Ceridian Corp. said late Wednesday it will be bought out by investment firm Thomas H. Lee Partners LP and insurance provider Fidelity National Financial Inc. for about $5.3 billion.
The Dow Jones industrial average slipped 5.44, or 0.04 percent, to 13,627.64, after reaching a new trading high of 13,673.07. On Wednesday, the Dow rose more than 111 points and set a new closing high of 13,633.08.
Broader stock indicators managed gains.
The Standard & Poor's 500 index advanced 0.39, or 0.03 percent, to 1,530.62, after soaring to a record close Wednesday for the first time since March 2000.
The technology-dominated Nasdaq composite index showed more pronounced movement, rising 11.93, or 0.46 percent, to 2,604.52. Gains in companies like Apple Inc. helped lift the Nasdaq. Apple rose $2.42, or 2 percent, to $121.19, after the company announced developments about its online products that pleased investors.
Bonds fell on the strong manufacturing data. The yield on the benchmark 10-year Treasury note rose to 4.89 percent from 4.87 percent late Wednesday.
The dollar was mixed against other major currencies, while gold prices rose.
Crude oil futures rose 52 cents to $64.01 a barrel on the New York Mercantile Exchange.
Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange.
The Russell 2000 index of smaller companies rose 3.83, or 0.45 percent, to 847.18, reaching its second-straight record close.
After Wachovia said it will buy A.G. Edwards, Wachovia slipped 36 cents to $54.19, and A.G. Edwards rose $11.01, or 14.3 percent, to $88.16.
In other corporate news yesterday, discount retailer Costco Wholesale Corp. and jewelry seller Tiffany & Co. released their financial results. Costco posted a fiscal third-quarter profit decline of 4.9 percent, while Tiffany reported a 15 percent rise in fiscal first-quarter profit.
Costco slipped 6 cents to $56.47, and Tiffany rose 11 cents to $52.57.