Stocks drift following mixed economic reports
by Associated Press
Published: January 6,2010
Stocks drifted in a narrow range following signs of growth in the services industry. The Institute for Supply Management said its services index rose to 50.1 in December from 48.7 in November. A reading above 50 signals growth.
The welcome news about service companies was offset by a report that employers cut 84,000 private sector jobs last month. The ADP National Employment Report came in worse than the forecasts of analysts polled by Thomson Reuters.
The latest batch of reports are similar to what investors have seen months – figures that reveal modest improvements but remind them that the economy remains weak. The stock market has been rising for 10 months on signs that the economy is recovering but analysts say stronger signs of growth will be needed to feed its advance in 2010.
Minutes from the Fed’s December meeting showed that a "few members" thought that the central bank’s $1.25 trillion program to buy mortgages could need to grow, rather than be phased out on March 31. The report did little to deepen investors’ insight into the Fed’s intentions for interest rates.
Dave Rovelli, managing director of trading at brokerage Canaccord Adams in New York, said traders are cautious ahead of a key employment report coming up Friday from the Labor Department. Economists expect that the unemployment rate ticked up to 10.1 percent in December from 10 percent in November.
"The unemployment number on Friday is the big deal," he said. "And it’s light volume so I wouldn’t be surprised if we just drift higher."
In late afternoon trading, the Dow Jones industrial average rose 16.85, or 0.2 percent, to 10,588.87. The broader Standard & Poor’s 500 index rose 2.17, or 0.2 percent, to 1,138.69, while the Nasdaq composite index fell 3.13, or 0.1 percent, to 2,305.58.
Three stocks rose for every two that fell on the New York Stock Exchange, where volume came to 757.3 million shares, compared with 790.3 million shares traded at the same point Tuesday.
Trading turned quiet this week after big gains Monday, the first trading day of 2010. The Dow industrials and the S&P 500 index stand at 15-month highs.
Bond prices fell, pushing their yields higher. The yield on the benchmark 10-year Treasury note rose to 3.82 percent from 3.76 percent late Tuesday.
The dollar mostly fell against other major currencies. Gold rose.
Oil rose above $83 per barrel for the first time since October 2008. Crude oil settled up $1.41 at $83.18 on the New York Mercantile Exchange.
The Russell 2000 index of smaller companies rose 0.18, or less than 0.1 percent, to 638.67.
Britain’s FTSE 100 rose 0.1 percent, Germany’s DAX index rose less than 0.1 percent, and France’s CAC-40 advanced 0.1 percent. Japan’s Nikkei stock average rose 0.5 percent.
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