Stocks edge up but Fed urges caution
THE DOW and S&P 500 inched higher, while the Nasdaq dipped yesterday after Federal Reserve officials said they were still worried about labour market weakness and a report on the services sector showed only slight improvement in the economy.
Cautious minutes from the Fed’s last meeting, as well as the ISM services report, which showed the sector hovering on the cusp of expansion, came after a number of data points helped lift stocks earlier this week to their highest closing levels in more than a year.
The private-sector ADP jobs report, which showed that private-sector job losses slowed in December from November’s pace, gave investors further pause for thought before Friday’s key non-farm payrolls number.
“The big party is tomorrow morning,” said Stephen Massocca, managing director at Wedbush Morgan in San Francisco. “Yesterday’s data points were mixed. I think that they are not that meaningful, and I think that the most important data point we will get will be tomorrow morning.”
Even with yesterday’s tiny gain, the S&P 500 eked out a new 15-month high.
The Dow Jones industrial average rose 1.66 points, or 0.02 per cent, to end at 10,573.68. The Standard & Poor’s 500 Index inched up just 0.62 of a point, or 0.05 per cent, to finish at 1,137.14. But the Nasdaq Composite Index dropped 7.62 points, or 0.33 per cent, to 2,301.09.
One bright spot was Family Dollar Stores, up 12.5 per cent at $30.92, after the retailer reported first-quarter earnings that beat expectations. Rival 99 Cents Only Stores climbed 5 per cent to $14.02.
The Nasdaq was pushed lower by losses in big-cap technology issues, including Apple Inc, down 1.6 per cent at $210.97, and Microsoft Corp, down 0.6 per cent at $30.77.
Weighing on the Dow was Travelers, down 1.4 per cent at $47.94 after FBR cut its rating on the insurer to “market perform” from “outperform.”
Another obstacle for stocks was the surge in the price of oil to above $83 a barrel, which pushed the Dow Jones Transportation Average down 0.6 per cent.