Market retreats amid mixed economic data

NEW YORK » Wall Street retreated modestly in wobbly trading yesterday, putting its buying spree on hold to mull over mixed economic data. The Dow Jones industrial average briefly surpassed 13,500 for the first time, then pulled back.

Investors refrained from making any big moves after data yesterday showed strength in some areas of the economy, particularly employment, but weakness in others -- giving little indication about whether the Federal Reserve will lean toward an interest rate cut later in the year.

Robust economic data yesterday included the U.S. Labor Department's report that jobless claims fell last week for the fifth straight week, and the Philadelphia Fed's May manufacturing index, which showed a stronger-than-anticipated increase. But the Conference Board forecasted slower economic growth, with its April index of leading economic indicators declining more than expected.

Ultimately, it was a fairly directionless day on Wall Street, with investors uninspired by yesterday's data and more eager to hear about today's consumer sentiment report from the University of Michigan, said John O'Donoghue, co-head of equities at Cowen & Co.

"The market's kind of on this monotonous grind higher, and you'll have days where you have a pause in the marketplace," O'Donoghue said. "But it doesn't seem like we're going to have a correction anytime soon."

New takeover activity, which has helped bring the Dow up more than 1,200 points over the past two months, failed to fuel a rally yesterday. Alliance Data Systems Corp. agreed yesterday to a $6.43 billion takeover by Blackstone Group, right after Acxiom Corp. said late Wednesday it was being bought by two private equity firms for $2.24 billion.

The Dow fell 10.81, or 0.08 percent, to 13,476.72, after rising as high as 13,516.71. On Wednesday, the index reached its 23rd record close of the year.

Broader indexes also declined. The Standard & Poor's 500 index lost 1.39, or 0.09 percent, to 1,512.75, and the Nasdaq composite index fell 8.04, or 0.32 percent, to 2,539.38.

The Russell 2000 index of smaller companies fell 4.56, or 0.56 percent, to 815.64.

Declining issues outnumbered advancers by 5 to 3 on the New York Stock Exchange, where volume came to 1.46 billion shares, down from 1.51 billion Wednesday.

Bonds fell after the unemployment data, pushing up the yield on the benchmark 10-year Treasury note to 4.76 percent from 4.71 percent late Wednesday.

Crude oil prices rebounded sharply on supply fears ahead of the summer driving season. A barrel of light sweet crude rose $2.31 to $64.86 on the New York Mercantile Exchange -- a bad sign for U.S. drivers, who have been seeing gasoline prices hit new records.

The dollar rose against other major currencies, while gold prices fell.

After their takeover offers were announced, private-label credit card services provider Alliance Data Systems rose $15.50, or 25 percent, to $78.46, and data management company Acxiom rose $4.28, or 18 percent, to $27.95.

The best performer among the 30 Dow components was Boeing Co., which said it struck a tentative deal to avoid a machinist union strike. The stock rose $1.10 to $96.44.