Posted on: Tuesday, March 15, 2005
Inflation worries mute Wall Street's advance
By Michael J. Martinez
Associated Press
NEW YORK — Wall Street managed a moderate gain yesterday in a volatile session that saw investors alternating between worries about interest rates and delight in a new wave of merger deals.
However, the gains were muted by the inflation worries that sent stocks falling last week, as Federal Reserve board member Janet Yellen warned that rising interest rates could hurt borrowers. A rise in oil prices also unnerved investors, with a barrel of light crude settling at $54.95, up 52 cents, on the New York Mercantile Exchange.
"Investors remain very, very concerned, and they should be, that we're headed toward higher inflation and higher interest rates," said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. "No matter how you say it, higher inflation and interest rates is the biggest risk that faces the stock market in 2005, and we are now seeing why."
The Dow Jones industrial average rose 30.15, or 0.28 percent, to 10,804.51.
The Standard & Poor's 500 index was up 6.75, or 0.56 percent, at 1,206.83, and the Nasdaq composite index gained 9.44, or 0.46 percent, to 2,051.04.
The bond market moved modestly higher, with the yield on the 10-year Treasury note falling to 4.51 percent from Friday's 4.55 percent. Gold prices fell as the U.S. dollar gained.
Advancing issues outnumbered decliners by about 4 to 3 on the New York Stock Exchange.
News of a successor to Michael Eisner at The Walt Disney Co. and a new chief executive officer at American International Group Inc. lifted stocks, as did planned acquisitions by Altria Group Inc. and IBM Corp.
