NEW YORK (CNN/Money) -
The Nasdaq managed to break its six-session losing streak to end the day higher Monday, while gains in the broader market were muted ahead of the Federal Reserve meeting on interest rates Tuesday.
The Dow Jones industrial average (up 26.26 to 9217.35, Charts) and the Standard & Poor's 500 index (up 3.00 to 980.59, Charts) each closed 0.3 percent higher. The Nasdaq composite (up 17.48 to 1661.51, Charts) managed to score a gain of 1.1 percent.
"There's not a lot happening ... it's just really, really quiet," said Tom Schrader, head of listed trading at Legg Mason. "You might see this kind of action through Labor Day. Typically, this just isn't a good time of the year to put money to work."
Techs managed to regain some steam on the back of Oracle and Adobe brokerage upgrades Monday, after several sessions of losses.
But August and September have historically been tough months for the market, and investors' hesitancy ahead of Tuesday's Federal Open Market Committee meeting added pressure.
In addition to the Fed meeting, investors prepared for some earnings reports Tuesday -- though most of the S&P 500 companies have already posted their quarterly results.
Chipmaker Applied Materials (AMAT: Research, Estimates) is expected to post earnings of 4 cents a share, down from 7 cents in the same quarter last year.
May Department Stores (MAY: Research, Estimates), Abercrombie & Fitch (ANF: Research, Estimates), J.C. Penny (JCP: Research, Estimates), TJX Cos. (TJX: Research, Estimates) and OfficeMax (OMX: Research, Estimates) also were among retailers due to report fiscal results Tuesday.
Fed in focus
Despite most economists' expectations that the central bank will leave interest rates at their current 45-year low during its meeting starting Tuesday, investors were cautious Monday.
"The focus point of the market this week is going to be tomorrow," said Ned Riley, chief investment strategist at State Street Global Advisors. "If anything, I'm hoping for neutrality out of the Fed."
Bond yields have held in a range over the past couple weeks after rising sharply during the first half of the summer. This newfound stability has tamed some investors' fears that rising interest rates could cut short an economic recovery.
But Treasury prices sank Monday, sending the 10-year note yield up to 4.36 percent from 4.27 percent late Friday, as its price dropped 27/32 of a point.
Traders said they were waiting to see if the Fed again mentions the possibility of purchasing longer-term Treasurys in an effort to push yields lower. In his testimony to Congress last month, Fed Chairman Alan Greenspan said it was highly unlikely the central bank would use extraordinary means to affect yields.
Techs lift Nasdaq
Meanwhile, the Nasdaq charged higher heading into the last hour of trading, led by enthusiasm over ratings upgrades for Oracle and Adobe.
Oracle (ORCL: up $0.39 to $11.68, Research, Estimates) bounced 3.5 percent after Merrill Lynch raised its rating on the business software maker to "buy" from "neutral," seeing a limited downside for the stock and expecting the company to benefit from a gradual economic recovery.
Adobe Systems (ADBE: up $1.48 to $33.26, Research, Estimates) climbed 4.7 percent after U.S. Bancorp Piper Jaffray lifted its rating on the stock to "strong buy" from "outperform."
Tech heavyweights Intel (INTC: up $0.32 to $23.90, Research, Estimates) and Microsoft (MSFT: up $0.03 to $25.61, Research, Estimates) also were also among the gainers on the Dow. The Goldman Sachs software index gained 1.8 percent, while the Philadelphia Semiconductor index jumped about 2.3 percent.
It was a light summer trading day, with volume on the New York Stock Exchange coming in at its lowest level so far this year. Market breadth was positive. Advancing stocks edged past decliners by about five to three on the NYSE, where 1 billion shares traded. On the Nasdaq, where 1.2 billion shares changed hands, the advance/decline ratio also stood at around five to three.
Stocks rose sharply in the first half of 2003 on investors' hopes that signs of a growing economy would start to pop up in the second half of the year. And with earnings season winding down, investors have been shifting their focus to economic news. Reports on consumer prices, wholesale prices, business inventories and retail sales, as well as the University of Michigan's preliminary reading on consumer sentiment in August are all due later in the week.
But surprisingly good data on the labor market and business spending would be needed to kick the market into high gear once again, traders said.
The Dow Jones industrial average ended last week higher, while the Nasdaq composite index closed the week on a down note.
European markets ended the day mixed. Asian stocks closed mostly higher Monday.
NYMEX light sweet crude oil futures pulled back 17 cents to $32.01 a barrel in New York. COMEX gold rose $5.40 an ounce to $363.30 -- its highest level in nearly two weeks, according to Reuters.
The dollar slipped against the yen and the euro.
|
