Stocks closed mixed after erratic session

NEW YORK » Wall Street ended an erratic session narrowly mixed Monday, largely shrugging off a lackluster sales report from Wal-Mart Stores Inc. and news of weak consumer spending last month.

The market's ability to withstand bad news -- especially from Wal-Mart, seen by many traders as a barometer of consumer sentiment -- illustrates the confidence many investors seem to have in the overall direction of the economy and Wall Street itself. Still, it was clear that investors were somewhat tentative after Friday's weaker-than-expected reading of the gross domestic product, the broadest measure of the economy.

Adding to concerns yesterday was the U.S. Commerce Department report that consumer spending rose an anemic 0.1 percent in September, the smallest increase in 10 months. Personal income, however, was up 0.5 percent.

"Personal spending was less than expected but then personal income was better than expected," said Stuart Freeman, chief equity strategist for A.G. Edwards & Sons.

He said investors will grapple with sometimes negative and seemingly contradictory economic data as they try to determine whether the economy will pull off a soft landing after the Federal Reserve's 17 straight interest rate increases that ended in July.

The Dow Jones industrial average fell 3.76, or 0.03 percent, to 12,086.50 after changing course several times.

Broader stock indicators rose. The Standard & Poor's 500 index was up 0.59, or 0.04 percent, at 1,377.93, and the Nasdaq composite index was up 13.15, or 0.56 percent, at 2,363.77.

Bonds rose, with the yield on the benchmark 10-year Treasury falling to 4.67 percent from 4.68 percent late Friday. The dollar was mixed against other major currencies, while gold prices rose.

Advancing issues outnumbered decliners by about 6 to 5 on the New York Stock Exchange, where consolidated volume came to 2.27 billion shares, compared with about 2.74 billion Friday.

The Russell 2000 index of smaller companies was up 4.52, or 0.59 percent, at 770.36.

Light, sweet crude settled down $2.39 at $58.36 a barrel on the New York Mercantile Exchange.

The markets appeared to dismiss comments yesterdayfrom Richmond Federal Reserve President Jeffrey Lacker, who said he was concerned about inflation.

Wal-Mart fell $1.20, or 2.4 percent, to $49.53 after reporting same-store sales, or sales at stores open at least a year, rose 0.5 percent in October, the smallest increase in nearly six years. The world's largest retailer had forecast an increase of 2 percent to 4 percent.