Stocks end first half with quiet session
NEW YORK » Wall Street ended a grueling first half quietly yesterday, closing mixed as investors again based their trades on what has become the dominant force in the market: the price of oil. The major indexes closed out the first six months of 2008 with double digit declines, and are perilously close to the levels of a bear market.
This was the worst first half for the Dow Jones industrials since 1970, when the country fell into recession. The more diverse Standard & Poor's 500 and Nasdaq composite indexes had their worst first half since 2002, when Wall Street was still suffering through the aftermath of the dot-com bust, the Sept. 11, 2001, attacks and a recession.
Yesterday, stocks pulled back in the early going as oil reached yet another record, this time, above $143 a barrel. The market then gathered some strength as crude lost momentum and allowed some investors to consider buying equities that have been turned into bargains by months of volatility.
The Dow is down nearly 20 percent from its record high of 14,198.09, set in October, putting the blue chips on the threshold of a bear market. The market did have a spring recovery, which began in March, but it foundered in May as the combination of credit problems and higher oil rattled investors.
"We've seen year-over-year estimates decline," said Christopher Johnson, president of Johnson Research Group in Cincinnati. "It'll be a critical season."
Investors made relatively small bets ahead of the coming earnings and as the quarter moved toward a close. The Dow rose 3.50, or 0.03 percent, to 11,350.01.
The S&P 500 index rose 1.62, or 0.13 percent, to 1,280.00, and the technology-laden Nasdaq fell 22.65, or 1.21 percent, to 2,292.98.
Light, sweet crude, which began the year at $96 a barrel, fell 21 cents yesterday to settle at $140 on the New York Mercantile Exchange while retail gasoline set a new national average of $4.086 a gallon.
Bond prices fell. The yield on the benchmark 10-year Treasury note, which tends to move opposite its price, rose to 3.98 percent from 3.97 percent late Friday.
The dollar was mixed against other major currencies, while gold prices fell.
Declining issues outpaced advancers by about 8 to 7 on the New York Stock Exchange, where volume came to 1.61 billion shares.
The Russell 2000 index of smaller companies fell 8.48, or 1.21 percent, to 689.66.
The Chicago Purchasing Managers' report on manufacturing, which tracks business conditions across Illinois, Michigan and Indiana, rose to 49.6 for June from 49.1 in May. However, a reading below 50 signals economic contraction.
The Labor Department is expected to release a June employment report Thursday that is expected to show the sixth straight month of jobs losses and only a modest improvement in the unemployment rate.