Posted on: Tuesday, May 3, 2005
Market closes up as investors wait on Fed
By Michael J. Martinez
Associated Press
NEW YORK — Stocks finished an uncertain session modestly higher yesterday despite a sharp rise in crude oil prices and unease over the Federal Reserve's upcoming meeting.
The Fed's Open Market Committee was expected to raise the nation's benchmark rate by a quarter percentage point to 3 percent at its meeting today. Many investors waited to see what the central bank would have to say in its economic assessment statement about the recent slowdown in growth and the prospects for inflation.
"There's a certain amount of caution, which is preventing investors from putting more assets to work," said Michael Sheldon, chief market strategist at Spencer Clarke LLC.
Yet while trading volume was lower than usual, the buying was broad based as some investors took a chance that the Fed's statement might be bullish for the market.
The bond market finished slightly higher after a volatile session, with the yield on the 10-year Treasury note falling to 4.19 percent from 4.20 percent late Friday. The dollar moved higher against most major currencies.
With conflicting economic data pointing to a malaise heading into summer, investors will look to the Fed for a more definitive take on the economy's direction.
Japanese financial markets were closed today for Constitution Day, a national holiday. Trading will resume on Friday after the "golden week" holidays.
Crude futures rallied in afternoon trading, reversing last week's trend and adding to worries about high energy prices as the summer driving season approaches. A barrel of light crude settled at $50.92, up $1.20, on the New York Mercantile Exchange.
