Stocks finish choppy session with modest gains
NEW YORK (AP) — Wall Street ended a mostly indecisive session with modest gains Thursday as investors, still uneasy about stocks’ high prices, hesitated to extend the previous session’s huge rally.
But analysts said investors, despite their nervousness, are concerned about missing out on the next bull market and so are more inclined to buy stocks than sell.
“It seems to be somewhat tentative,” said Peter Cardillo, president and chief strategist of Global Partner Securities Inc., of Thursday’s trading. “But nevertheless, I kind of think what we are seeing is people trying to get in the market who held out in the month of September. … Investors want to be long in the market.”
The Dow Jones industrial average closed up 18.60, or 0.2 percent, at 9,487.80, having surged 194.14 — its biggest daily gain since June — in the previous session.
The broader market also finished higher. The Nasdaq composite index rose 3.97, or 0.2 percent, to 1,836.22, following Wednesday’s gain of 45.31, its biggest one-day increase in three months.
The Standard & Poor’s 500 index advanced 2.02, or 0.2 percent, to 1,020.24, having climbed 22.25 in the previous session, its biggest daily gain in six months.
Stocks had a tough time advancing given investors’ concern about prices. Some market observers are worried that economic data is not sufficiently upbeat to keep the market on its upward path.
“You have gone from a market that was powered by improving fundamentals and undervalued positions. … Where do the fundamentals take us from here, because we are fairly valued,” said Kevin Caron, market strategist, Ryan, Beck & Co., LLC.
Thursday’s economic news was disappointing, which also pressured Wall Street and made it hard for stocks to advance.
Orders to U.S. factories dropped by 0.8 percent in August, the first decline in four months, the Commerce Department said. Economists expected a smaller decline of 0.5 percent. The weakness was broad-based, with orders falling for both big-ticket items, such as cars, and “nondurable” goods, such as clothes.
The Labor Department reported new claims for jobless benefits moved higher last week as laid-off workers who had delayed filing because of Hurricane Isabel finally made it into state offices to do so.
New applications for unemployment benefits rose by a seasonally adjusted 13,000 to 399,000 for the work week ending Sept. 27, the highest level in two weeks.
Ashland Inc. advanced $1.54 to $35.42 after Bear Stearns raised its rating on the oil services and diversified chemicals company to “peer perform” from “underperform.”
Chipmaker Advanced Micro Devices rose 52 cents to $11.69 after J.P. Morgan upgraded it to “neutral” from “underweight.”
H.J. Heinz Co. rose 61 cents to $35.21 after Deutsche Securities upgraded the food company to “buy” from “hold.”
Retailer Guessâ¢ Inc. advanced 23 cents to $9.05 after reporting that September same-store sales, those at stores open at least one year, rose 13.5 percent.
Software maker Intuit Inc. fell $1.60 to $47.62 after reaffirming its August forecast calling for a loss of 29 cents to 33 cents a share in the fiscal first quarter ending Oct. 31.
Staples Inc. fell 58 cents to $23.82 and Office Depot Inc. declined 24 cents to $14.34 after Banc of America Securities lowered its ratings on the office supply retailers to “neutral” from “buy.”
Advancing issues outnumbered decliners about 8 to 5 on the New York Stock Exchange. Consolidated volume was light at 1.60 billion shares, below 1.97 billion on Wednesday.
The Russell 2000 index, the barometer of smaller company stocks, rose 2.88, or 0.6 percent, to 503.20.
Overseas, Japan’s Nikkei stock average finished Thursday up 2.2 percent. In Europe, France’s CAC-40 rose 0.1 percent, Britain’s FTSE 100 advanced 1 percent, while Germany’s DAX index fell 1.6 percent.