Economic uncertainty stalls stock market
• Hawai'i Stocks
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By Hope Yen
Associated Press
NEW YORK — The stock market stalled today, held back by a reported investigation of Boeing and profit-taking from Wall Street's recent rally. Shares closed mixed in light trading.
Analysts said investors played it safe following several weeks of strong earnings and in advance of the Federal Reserve's meeting tomorrow on interest rates. Fed policymakers are expected to leave interest rates unchanged, but investors are eager to see their accompanying comments on the state of the economy.
"We're in between major events," said Steve Kolano, an equity trader at the Boston Company Asset Management. "We had a really good rally on Friday behind strong volume. Right now we're stuck in a range because there's not a lot of evidence yet to take the market higher."
The Dow Jones industrial average closed down 51.11, or 0.6 percent, at 8,531.57, having gained 3.3 percent last week to reach its highest level since January.
The broader market finished narrowly mixed. The Nasdaq composite index rose 1.16, or 0.1 percent, to 1,504.04, following a weekly advance of 4.8 percent to its best close in 10 months. The Standard & Poor's 500 index fell 3.53, or 0.4 percent, to 926.55, having increased 3.5 percent.
Boeing dropped $1 to $27.62 after the Wall Street Journal reported that the Justice Department is investigating whether the company improperly used a competitor's documents to win a military contract.
Stocks have surged in recent weeks on investor optimism following better-than-expected first-quarter earnings. But analysts caution that trading will likely be choppy in the near future unless there is solid evidence of an economic recovery.
"It's a mixed bag on short-term economic news," said Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee. "The market has been moving really well in the face of negative news. But there's a feeling that at some point it will need fundamentals to support it."
A better-than-expected report on the U.S. services sector temporarily lifted the Dow into positive territory early today but the blue chips soon lost momentum.
The Institute for Supply Management reported that its non-manufacturing index came in at 50.7 in April, up from 47.9 in March, according to Dow Jones Newswires. A reading above 50 indicates growth in the sector; analysts were expecting 49.
An earnings report from Cisco Systems set to be released after the close of markets tomorrow will provide an indication of whether the tech sector is set to boost capital spending in the second half of the year, Kolano said.
"There's a mixed feeling about where the economy is headed. So investors are in a wait-and-see mode," he said.
Gainers included Oxford Health Plans, which climbed $3.55 (11.7 percent) to $33.90, after the health insurer said first-quarter profit rose despite charges from a legal settlement.
Advancing issues outnumbered decliners 4 to 3 on the New York Stock Exchange. Volume was light.
The Russell 2000 index, a barometer of smaller company stocks, rose 2.14, or 0.5 percent, to 409.81.
