fail to move stocks
NEW YORK >> Stocks wobbled in and out of positive territory yesterday, settling near unchanged levels as the market shrugged off a pair of economic reports that suggested continued strength in the recovery.
A surge in manufacturing activity and better-than-expected data on housing construction failed to impress investors, who are preoccupied with two events expected at the end of the month: an interest rate hike and the hand-over of political power in Iraq. Analysts say the markets are likely to lurch sideways in the meantime, as investors wait to see what will happen.
"I think for the next several weeks, we're not likely to see major directional moves," said Jack Caffrey, equities strategist with J.P. Morgan Private Bank. "We're more likely to see a few days up and a few days down. It's going to be frustrating. But there will be some opportunities created, both to buy and to sell."
The Dow Jones industrial average closed down 0.85, or 0.01 percent, at 10,379.58.
The broader gauges also finished narrowly higher. The Nasdaq composite index gained 2.63, or 0.1 percent, to 1,998.23. The Standard & Poor's 500 index added 1.55, or 0.1 percent, to 1,133.56.
The price of the Treasury's 10-year note closed down 38 point, while its yield rose to 4.72 percent from 4.68 percent yesterday. Two-year Treasury notes fell 332 point and yielded 2.80 percent, up from 2.75 percent yesterday.
There was fresh evidence that the recovery of manufacturers is on track, as the Federal Reserve reported a 1.1 percent rise in big industry production for May, the strongest showing in nearly six years. The advance well outpaced the 0.6 percent rise forecast by economists.
Separately, the Commerce Department reported builders broke ground on fewer housing projects in May, but the level of activity was still brisk enough to exceed expectations. Total housing permits -- a good barometer of current demand -- were up 3.5 percent at 2.01 million units, the highest level in more than three decades.
Concern over oil prices was renewed after a sabotage attack in Iraq forced a suspension of exports from the Gulf. The Organization of Petroleum Exporting Countries indicated its members would make up for any shortfall in Iraqi crude, but analysts worry there could be more attacks as the U.S.-led coalition prepares to transfer political power to local authorities on June 30.
Investors were in a better mood Tuesday, after Fed Chairman Alan Greenspan told Congress that inflationary pressures were not likely to be a serious concern in the months ahead. His remarks sparked a short-term rally.