Stocks close mixed in uneven trading
NEW YORK » Stocks closed mixed in uneven post-holiday trading yesterday as a rebound in bond yields stifled Wall Street's excitement about new buyout activity and strength in the U.S. service sector.
The Institute for Supply Management's index of service sector activity rose to 60.7 in June from 59.7 in May, indicating that non-manufacturing industries saw slightly faster expansion. The figure was better than expected, fueling sentiment that the economy is recovering from a slow first quarter.
However, the data weighed on bond prices, which were already weak after payroll company Automatic Data Proc- essing and consultancy Mac-roeconomic Advisers said the private sector added 150,000 jobs last month.
As bond prices fell, the 10-year Treasury note's yield shot up to 5.14 percent yesterday from 5.04 percent Tuesday, ahead of the July Fourth holiday. On Monday, the 10-year yield had slipped below the 5 percent level for the first time since early June.
But the 10-year Treasury yield would have to rise significantly to do any real damage to the stock market, said Joe Balestrino, a portfolio manager at Federated Investors Inc. "If things are good, yields are supposed to be a little higher."
Also hurting the Dow Jones industrial average was General Motors Corp., one of the blue-chip index's 30 components. GM was downgraded by a Bear Stearns analyst after the automaker on Tuesday posted a 21.3 percent drop in June sales compared to last year.
The Dow fell 11.46, or 0.08 percent, to 13,565.84.
The Russell 2000 index of smaller companies rose 1.93, or 0.23 percent, to 850.13.
Declining issues outnumbered advancers by about 4 to 3 on the New York Stock Exchange, where consolidated volume came to 2.62 billion shares, up from 1.52 billion shares in Tuesday's abbreviated session.
The dollar rose against most major currencies on strong U.S. economic data, and gold prices fell.
Light, sweet crude futures bounced back from earlier losses, rising 40 cents to $71.81 a barrel on the New York Mercantile Exchange.
Broader stock indicators were narrowly mixed. The Standard & Poor's 500 index rose 0.53, or 0.03 percent, to 1,525.40, while the Nasdaq composite index rose 11.70, or 0.44 percent, to 2,656.65.
The Nasdaq was lifted in part by Apple Inc., which rose $5.71, or 4.5 percent, to $132.88 after hitting an all-time high on continued enthusiasm over the iPhone. BlackBerry maker Research In Motion Ltd. also buoyed the Nasdaq, reaching a record high after saying it got cleared to sell its smartphones in China. Research in Motion rose $8.34, or 4 percent, to $216.28.
Chemical company Huntsman Corp. said Wednesday a private equity firm made a cash buyout offer of about $6 billion that trumps last week's bid from a Dutch company; and a Coca-Cola Co. spokesman said Wednesday the company is looking into buying Cadbury Schweppes PLC's Snapple iced tea brand.
Huntsman jumped $3.06, or 12.5 percent, to $27.46.
Coca-Cola slipped 26 cents to $52.64, while GM fell $1.20, or 3.2 percent, to $36.78 after the analyst downgrade.