Stocks close mixed as wholesale prices jump
NEW YORK » Stocks finished mixed in another volatile session yesterday after a spike in wholesale prices touched off inflation concerns and partially overshadowed a strong increase in retail sales last month.
Despite the uneven economic news, a strong forecast by Honeywell International Inc. propped up the Dow Jones industrial average.
Wall Street, which has this week paid close attention to steps by the Federal Reserve to stoke greater movement in moribund credit markets, again looked to fresh economic data for signals about the health of the economy.
In one unwelcome development, prices at the wholesale level jumped 3.2 percent in November -- their biggest increase in 34 years -- after a steep rise in wholesale gasoline prices. The news wasn't all bad, however. The U.S. Commerce Department said retail sales rose in November by the largest amount in six months, and a U.S. Labor Department report showed a drop in new claims filed by those seeking jobless benefits.
The Dow Jones industrial average rose 44.06, or 0.33 percent, to 13,517.96, after being down more than 100 points earlier. The Standard & Poor's 500 index edged up 1.82, or 0.12 percent, to 1,488.41, while the Nasdaq composite index declined 2.65, or 0.10 percent, to 2,668.49.
The Russell 2000 index of smaller companies fell 2.25, or 0.29 percent, to 769.46.
Declining issues outnumbered advancers by more than 2 to 1 on the New York Stock Exchange, where volume came to 1.29 billion shares.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, jumped to 4.19 percent from 4.06 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude for January delivery fell $2.14 to settle at $92.25 a barrel on the New York Mercantile Exchange.
The producer price index, which measures inflation at the wholesale level, rose 3.2 percent in November, according to the Labor Department. But excluding the often volatile food and energy sectors, inflation rose by 0.4 percent. While the Fed generally looks at inflation figures excluding food and energy costs, a sharp rise in overall inflation could make it harder for the central bank to continue cutting interest rates.
And retail sales jumped 1.2 percent in November, double the increase economists had expected.
In corporate news, Honeywell gained after forecasting 16 percent to 21 percent growth in earnings per share for 2008. Analysts polled by Thomson Financial had been expecting 17 percent growth. Honeywell, one of the 30 stocks that comprise the Dow industrials, rose $3.91, or 5 percent, to $60.65.
JetBlue Airways Corp. jumped 90 cents, or 14.4 percent to $7.15 after German airline Deutsche Lufthansa AG said it plans to pay $300 million for a 19 percent stake in JetBlue.
Dow Chemical Co. rose $2.64, or 6.3 percent, to $44.329 after agreeing to sell a 50 percent stake in five of its global businesses to a Kuwaiti company for about $9.5 billion to form a joint petrochemicals venture.