Market ends mixed on credit worries, oil
NEW YORK » Wall Street closed mixed yesterday after playing out a now familiar scenario: Upbeat sentiment about falling oil prices flagged amid ongoing concerns about weak credit markets and the economy. The major indexes also turned in a mixed performance after another volatile week.
Investors were encouraged early in the session as oil's pullback lifted the outlook for consumer companies and eased concerns that record-high energy prices would force Americans to curb spending. Light, sweet crude dropped $1.24 to settle at $113.77 a barrel on the New York Mercantile Exchange, and earlier traded as low as $111.34, its lowest level in more than three months.
Oil fell on a growing sense that economies around the world are joining the U.S. in a slowdown. The rising dollar, which is gaining strength on economic concerns, contributed to the sell-off in crude and other commodities. Crude is down more than $35 from its July 11 record of $147.27; meanwhile, gold prices that swept past $1,000 an ounce earlier this year are now below $800.
"With some of this sharp price collapse in commodities you would think the market would be up a lot more," said Greg Church, chief investment officer of Church Capital Management. "The underlying factor is that credit continues to appear to be very weak."
The Dow rose 43.97, or 0.38 percent, to 11,659.90.
Broader indexes were narrowly mixed. The Standard & Poor's 500 index rose 5.26, or 0.41 percent, to 1,298.20, while the Nasdaq composite index fell 1.15, or 0.05 percent, to 2,452.52.
The Russell 2000 index, which tracks small-cap stocks, fell 1.01, or 0.13 percent, to 753.37.
Volume remained extremely light, exaggerating moves in the major indexes. On the New York Stock Exchange, advancing issues were relatively even with decliners; consolidated volume came to 3.99 billion, about even with Thursday.
For the week, the Dow finished down 0.63 percent and the S&P 500 rose a modest 0.15 percent. The tech-focused Nasdaq, however, logged its fifth-straight weekly gain by finishing up 1.59 percent; it has risen 8.5 percent since mid-July.
The uncertainty in the market has increased demand for the safety of government debt, which rose modestly yesterday. In late trading, the yield on the benchmark 10-year Treasury note, which moves opposite its price, slid to 3.84 percent from 3.90 percent late Thursday.
The dollar rose against other major currencies, contributing to yesterday's pullback in oil and other commodities.
The day brought somewhat disappointing news about consumers. The University of Michigan reported a slightly smaller-than-expected rise in consumer sentiment in early August compared with July, evidence that the consumer remains under pressure.
Moreover, earnings outlooks from retailers J.C. Penney Co. and Abercrombie & Fitch Co. yesterday were below forecasts.
"At the beginning of this year, earnings expectations started to drop precipitously, and the stock market dropped with them," said Scott Bleier, founder of market advisory service CreateCapital.com. "Those expectations got built into the stock market and to an excess. A lot of stocks discounted all of the bad news that was out there."
Airline stocks rose on the drop in oil. AMR Corp., the parent company of American Airlines, gained 46 cents, or 4.1 percent, to $11.74.