May 19, 2008 1:47 pm US/Pacific
Stocks Finish Mixed Following Tech Pullback
NEW YORK (AP) ―
Stocks traded mixed Monday after weakness in the technology sector unraveled some of Wall Street's enthusiasm over an economic report that suggested the economy could still be growing.
The Dow Jones industrial average, which had been up more than 100 points, traded well off its highs.
The Conference Board's leading economic indicators report showed a 0.1 percent rise for April, following a similar uptick in March. The index, aimed at predicting economic activity in the next three to six months, bolstered investors' belief that the overall U.S. economy, while weak, is positioned for recovery.
After five months of declines in the index, some investors had been worried that March's increase was an anomaly — so April's advance was met with relief, said Hugh Johnson, chief investment officer of Johnson Illington Advisors.
But technology shares tugged at the market after memory chip maker SanDisk Corp. warned of soft sales at JPMorgan's technology conference Monday, said Neil Massa, senior trader at MFC Global Investment Management in Boston. SanDisk fell $2.48, or 7.6 percent, to $29.96.
SanDisk's cautious comments came on a day of light trading and dented but didn't erase an upbeat mood on Wall Street.
"Even though you're up only 0.1 percent, it's very good news that the declining trend may have been reversed," Johnson said, referring to the leading indicators report. "That is important for this reason: It's consistent with the message of the markets." The broader market, as measured by the Standard & Poor's 500 index, rose 2.67 percent last week on cautious optimism about the economy.
In late afternoon trading, the Dow rose 61.47, or 0.47 percent, to 13,048.27. The blue chips had been up nearly 150 points earlier in the session.
Broader stock indicators were mixed. The S&P 500 advanced 3.73, or 0.26 percent, to 1,429.08, and the Nasdaq composite index slipped 0.29, or 0.01 percent, to 2,528.36.
Government bond prices turned higher as the rally in stocks cooled. The yield on the benchmark 10-year Treasury note, which moves opposite its yield, fell to 3.84 percent from 3.85 percent late Friday.
The dollar rose against most other major currencies, while gold prices also climbed.
One pressure point for the economy — rising energy prices — appeared relatively in check Monday. While many investors likely remain mindful of the rising price of oil and its effect on consumer spending, Wall Street appeared relieved as energy prices mainly treaded water. Crude climbed above $127 a barrel on the New York Mercantile Exchange, while the price of a gallon of regular gasoline topped $4 for the first time in two U.S. metropolitan areas. Still, energy didn't seem as large of a concern as in some recent sessions.
Light, sweet crude fell $1 to $125.80 a barrel on the Nymex.
In corporate news, Microsoft Corp. has renewed talks with Yahoo Inc. about a possible deal to bolster the companies' position in the online search and advertising markets. The software maker did not say if the discussions included a takeover of Yahoo. Yahoo said its directors "remain open to pursuing any transaction which is in the best interest of our stockholders."
Microsoft fell 49 cents to $29.50, and Yahoo slipped 14 cents to $27.52.
General Motors Corp. rose after one of its biggest suppliers reached a tentative labor deal with the United Auto Workers. The agreement with American Axle & Manufacturing Holdings Inc. may end a nearly three-month strike by 3,650 U.S. hourly workers. GM advanced 33 cents to $21.01.
Lowe's Cos. posted a first-quarter profit decline and issued an outlook for the year that came in below analyst estimates. The second-largest home improvement chain fell 61 cents, or 2.5 percent, to $24.28.
The Russell 2000 index of smaller companies slipped 0.01, or less than 0.01 percent, to 741.18.
Advancing issues outpaced decliners by about 8 to 7 on the New York Stock Exchange, where volume came to 820.5 million shares.
In overseas trading, Tokyo's Nikkei closed up 0.35 percent. In Europe, London's FTSE closed up 1.15 percent, Frankfurt's DAX rose 0.97 percent and Paris' CAC 40 was up 1.26 percent.
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