US stocks finished flat yesterday as cautious comments from FedEx and weak housing market data overshadowed a surge in industrial production.
Investors were caught off guard after package company FedEx, deemed an economic bellwether because it serves a wide range of industries, said higher costs would constrain 2011 earnings. FedEx shares slid six per cent to $78.07.
The US government said housing starts fell more than expected in May, underscoring the uneven nature of the economic recovery and casting a shadow over better-than-expected industrial production data for the same month. The market’s slow churn kept the S&P 500 above its 200-day moving average a day after the index exceeded that level for the first time in a month. Investors took that as a positive signal because they view the 200-day average as an important momentum indicator.
“Essentially, the market has held on to yesterday’s gains and you have to call that encouraging,” said Michael Sheldon, chief market strategist at RDM Financial.
The Dow Jones industrial average added 4.69 points, or 0.05 per cent, to 10,409.46. The Standard & Poor’s 500 Index edged down just 0.62 of a point, or 0.06 per cent, to 1,114.61. And the Nasdaq Composite Index inched up just 0.05 of a point, or 0.00 per cent, to 2,305.93.