Jittery market ends mixed after selloff
NEW YORK » Stocks closed mixed yesterday, with Wall Street exhausted from last week's swoon and still nervous about the effect of bank losses and energy costs on the economy.
A pullback in crude oil prices provided only limited relief to investors, who largely stuck to the stocks of large companies. Blue chips are regarded as safer assets during times of economic uncertainty.
"It's hard for anyone to jump in whole hog after Friday," said Thomas J. Lee, equities analyst at JPMorgan. Soaring energy prices, as well as a huge jump in the unemployment rate, sent the Dow Jones industrial average plunging nearly 400 points on Friday.
"I think everyone's going to watch oil, and I think it's going to paralyze us for a while," Lee said.
Crude prices dipped more than $4 to settle at $134.35 a barrel yesterday on the New York Mercantile Exchange, but only after Friday's $11-a-barrel surge to a record. With U.S. gasoline topping $4 a gallon, consumers' ballooning energy bills could force them to keep paring back spending on other items.
The financial sector was particularly weak yesterday, after Lehman Brothers Holdings Inc. posted an unexpectedly large quarterly loss of $2.8 billion -- the investment bank's first since it spun off from American Express Co. in 1994. The poor performance added to uncertainty about how long it will take banks to recover from the mortgage market's near collapse.
"The financials are a key factor in today's market. It almost seems we're stuck in this range, trying to figure out when the end of this whole financial crisis is over," said Anthony Conroy, managing director and head trader for BNY ConvergEx Group.
The Dow rose 70.51, or 0.58 percent, to 12,280.32 after Friday's rout, which was the worst tumble on Wall Street in 15 months. During trading yesterday, the blue-chip index rose more than 100 points, fell briefly into negative territory, and then rebounded again.
Broader stock indicators finished mixed. The Standard & Poor's 500 index rose 1.08, or 0.08 percent, to 1,361.76, while the Nasdaq composite index fell 15.10, or 0.61 percent, to 2,459.46.
Declining issues outnumbered advancers by nearly 2 to 1 on the New York Stock Exchange. Consolidated volume amounted to 4.27 billion shares, down from 4.69 billion on Friday.
The Russell 2000 index of smaller companies fell 5.12, or 0.69 percent, to 735.25.
Bond prices fell due to ongoing jitters about inflation, as well as a report from the National Association of Realtors saying pending sales of existing homes rose more than 6 percent in April to the highest level since October.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.99 percent from 3.91 percent late Friday.
The dollar rose against most other major currencies Monday, while gold prices turned lower.
Lehman, which plans to raise $6 billion in new capital through a stock offering, saw its shares fall $2.81, or 8.7 percent, to $28.81.
Apple Inc. weighed on the technology-dominated Nasdaq, falling $4.03, or 2.2 percent, to $181.61, after unveiling an upgraded iPhone with a lower price.