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Stocks Nearly Still As Investors Await Fed

Posted on: Thursday, 15 September 2005, 15:00 CDT

NEW YORK - Stocks barely moved Thursday as investors wondered whether a welter of weak economic data would end the Federal Reserve's year-long streak of interest rate hikes.

Investors were displeased when the Philadelphia Federal Reserve reported a decline in almost every broad indicator it uses to measure the health of its region's manufacturing. The readings "suggest little to no growth this month," the report said.

The Labor Department reported lower-than-expected inflation data, but gasoline prices jumped by the largest amount in 2 1/2 years and unemployment filings spiked. Roughly 68,000 Americans filed for unemployment last week due to Hurricane Katrina, the largest increase in nearly a decade.

Traders hope signs of a weakening economy will cause the Federal Reserve to curb its year-plus streak of interest rate hikes when the central bank's Open Market Committee meets next Tuesday.

"A lot of investors are in a wait-and-see mode until we get the Fed behind us next Tuesday," said Arthur Hogan, chief market analyst at Jefferies & Co. "There's a real split between those who think the Fed will and should take a break and those who think it will continue" incremental rate hikes.

In late afternoon trading, the Dow Jones industrial average rose 10.11, or 0.1 percent, to 10,555.01.

Broader stock indicators were slightly lower. The Standard & Poor's 500 index fell 0.53, or 0.04 percent, to 1,226.63 and the Nasdaq composite index fell 4.06, or 0.19 percent, to 2,145.27.

Bonds fell sharply, with the yield on the 10-year Treasury note rising to 4.21 percent from 4.16 percent late Wednesday. The U.S. dollar was mixed against other major currencies in European trading. Gold prices were lower.

Crude oil futures fell. A barrel of light crude was quoted at $64.75, down 34 cents, in trading on the New York Mercantile Exchange.

In company news, both Delta Air Lines Inc. and Northwest Airlines Corp. filed for bankruptcy protection Wednesday, as expected. The carriers have been hurt by high fuel prices and labor problems. Delta rose 11 cents to 82 cents a share and Northwest fell 97 cents to 90 cents a share. The New York Stock Exchange is studying whether Delta should continue to be listed on the exchange.

Investment bank Bear Stearns Cos. fell $2.88 to $102.62 after its third-quarter profit swelled 34 percent to easily beat Wall Street's targets but its revenue from the company's core bond segment declined slightly.

Google Inc. fell 35 cents to $301.74 after it said it would offer $4.18 billion in stock at $295 a share. The increase came despite the fact that the new offering will dilute current shareholders' value and the company has not specified how it will use the money.

Time Warner Inc. rose 63 cents to $18.55 on a New York Post report that it was in talks with Microsoft Corp.'s Web unit, MSN, to sell a stake in America Online.

Declining issues slightly outnumbered advancers on the New York Stock Exchange, where volume was 989.07 million, up from 801.52 million at the same time Wednesday.

The Russell 2000 index of smaller companies fell 0.37, or 0.06 percent, to 665.98.

Overseas, Japan's Nikkei stock average rose 1.19 percent. Britain's FTSE 100 rose 0.68 percent, Germany's DAX index was down 0.11 percent, and France's CAC-40 was up 0.20 percent.

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On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

Source: Associated Press/AP Online

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