Stocks jump around but close mostly up
NEW YORK » Wall Street ended another erratic session mostly higher yesterday as investors, waiting for the Federal Reserve's next move to steady the markets, made few big commitments to stocks.
Comments from policymakers and government officials tugged at a market looking for any evidence the Fed will cut rates to help contain the credit crisis that began with the failure of subprime loans.
The Fed has taken a number of steps to prop up the nation's financial institutions ahead of its scheduled Sept. 18 meeting, including injecting more liquidity into the banking industry and cutting the discount rate.
Traders reacted positively to comments from Senate Banking Committee Chairman Christopher Dodd who said Fed Chairman Ben Bernanke isn't satisfied with Wall Street's response to his efforts to stabilize markets torn by anxiety about shrinking credit. Dodd, after a meeting with Bernanke and Treasury Secretary Henry Paulson, said policymakers plan to use "all tools available" to complete its mission.
But that bullishness cooled after Fed President Jeffrey Lacker said the central bank's policy must be guided by fundamentals, rather than market swings -- indicating that a cut in the fed funds rate cut might not be among the tools the Fed plans to use.
The 30-stock Dow Jones industrial average fell 30.49, or 0.23 percent, to 13,090.86 after moving in and out of positive territory throughout the day.
Broader market indexes were slightly higher. The Standard & Poor's 500 index rose 1.57, or 0.11 percent, to 1,447.12, and the Nasdaq composite index rose 12.71, or 0.51 percent, to 2,521.30. The Russell 2000 index of smaller companies added 0.93, or 0.12 percent, to 788.38.
Advancing issues outnumbered decliners by about 3-to-2 on the New York Stock Exchange, where volume came to 1.35 billion shares.
Bonds continued to rally as more investors moved money from stocks to the safer haven of the Treasury market. The yield on the benchmark 10-year Treasury note fell to 4.59 percent from 4.63 percent late Monday. Bond prices move opposite yields.
"Volatility isn't a bad thing, and usually is positive after an initial down swing like we had. It means cash reserves are being raised and employed," said A.C. Moore, chief investment strategist for Dunvegan Associates.
Countrywide Financial Corp. was said to be a takeover target due to losses linked to distressed subprime mortgages. And, investors expected more layoffs after Capital One Financial Corp. said it was shuttering its GreenPoint Mortgage unit and slashing 1,900 jobs.
Capital One shares rose $1.75, or 2.6 percent, to $68.47; Countrywide spiked $1.98, or 10 percent, to $21.79.
Target Corp. added $1.01 to $60.10 after it reported profit grew 13 percent. The discount retailer said profit rose almost 13 percent, but was cautious on the rest of the year.
Staples Inc., the largest U.S. office supplies retailer, reported a higher quarterly profit yesterday, matching Wall Street projections. However, it issued a cautious forecast for the rest of the year.
The stock fell 1 cent to $23.30.