MARKET REPORT : Oft-told tale mixes session’s outcome
Posted on Wednesday, May 14, 2008
URL: http://www.nwanews.com/adg/Business/225700/
NEW YORK — Wall Street turned in a mixed performance Tuesday after a fresh report on retail sales and a new oil price record told investors the same old story: The economy is hurting and costs are rising, but things could be worse.
The Dow Jones industrial average fell 44. 13, or 0. 34 percent, to 12, 832. 18, after soaring 130 points Monday.
The Commerce Department’s latest report showed that retail sales fell by 0. 2 percent in April as expected. The data did show better-than-expected sales if automobiles are excluded but indicated that Americans are shying away from big-ticket purchases, particularly as soaring fuel prices cut into demand.
“The numbers are coming out weak, but the economy’s not falling apart,” said Alexander Paris, economist and market analyst for Chicago-based Barrington Research. “On balance they were negative, but you’d expect them to be.”
Tuesday’s wavering trading in the stock market reflected its uncertainty about the economy. Brian Gendreau, investment strategist for ING Investment Management, believes investors won’t get a clear picture until more data come out in June and July.
“We’re going to go through a period where the markets are going to focus on the macro-data and any adverse piece of news about the credit markets,” he said. “It will be a trendless market until the uncertainties about a contraction in economic activity are resolved.”
According to Federal Reserve Chairman Ben Bernanke, turmoil in financial markets has eased somewhat. He noted during his speech in Atlanta that the markets for certain mortgage-backed securities, such as those backed by Fannie Mae and Freddie Mac, as well as some fixed-rate mortgages and corporate debt have improved. He did say, though, that the situation remains “far from normal.”
Broader indexes closed mixed Tuesday. The Standard & Poor’s 500 index fell 0. 54, or 0. 04 percent, to 1, 403. 04, and the Nasdaq composite index rose 6. 63, or 0. 27 percent, to 2, 495. 12.
The Russell 2000 index of smaller companies rose 3. 62, or 0. 49 percent, to 736. 85.
Advancing issues outnumbered decliners about 8-7 on the New York Stock Exchange, where volume came to 3. 86 billion shares.
Government bond prices fell as the Treasury market focused on the better-than-expected details in the retail sales report. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3. 90 percent from 3. 80 percent late Monday.
Oil prices rose to a trading record of $ 126. 98 a barrel on the New York Mercantile Exchange after Iranian news services reported that Iran is considering a cut to output. Prices later settled up $ 1. 57 at $ 125. 80.
Overseas, Japan’s Nikkei stock average fell 1. 53 percent. Britain’s FTSE 100 slid 0. 14 percent, Germany’s DAX index rose 0. 34 percent, and France’s CAC-40 rose 0. 45 percent.