NEW YORK (CNN/Money) -
The Nasdaq declined and the other major indexes finished nearly unchanged after a skittish trading session Wednesday that saw investors reluctant to take action ahead of Friday's jobless report and after the morning's ho-hum economic news.
The Nasdaq composite (down 6.29 to 2033.36, Charts) closed about 0.3 percent weaker, while the Dow Jones industrial average (up 1.63 to 10593.11, Charts) and the Standard & Poor's 500 (up 1.93 to 1151.03, Charts) index both closed just above unchanged. All three had been weaker throughout the session.
The session seemed to typify the market action over the last six weeks, with the Nasdaq declining, after having led the rally in 2003, and the Dow and S&P 500 swaying in more scattered trade.
"The decline we've been seeing the last few days may be short lived, and we may get a little rally tomorrow," said Peter Green, a market analyst at MKM Partners. "But beyond that, near-term we've seen the highs. The Nasdaq, which led the rally last year, is continuing to lag the broader market, which is a negative."
Green said the market is trading on the heels of what the dollar is doing, with investors wary about a stronger greenback, after enjoying the benefits of a weaker U.S. currency for some time. He also said the market is stalling a bit right ahead of Friday's non-farm payrolls reading for February.
The current consensus calls for 125,000 new jobs to have been added to the payrolls, according to Reuters and Briefing.com surveys of economists. That would be up slightly from the 112,000 new jobs created in January. The unemployment rate is expected to hold steady at 5.6 percent.
"The payrolls number is probably going to be in line, and we'll see another session of listless trading," said Tom Schrader, managing director of U.S. equity trading at Legg Mason Wood Walker. "But if it is something dramatic, we could see a violent reaction, one way or the other."
Thursday brings a trio of economic reports in the early going. Weekly jobless claims and the revised reading on fourth-quarter productivity are due before the bell, while a report on factory orders is due just after the open.
Jobless claims are forecast to have fallen slightly to 345,000 claims last week from 350,000 the week before, according to Briefing.com estimates. Productivity in the fourth-quarter is expected to have grown 2.7 percent, unchanged from the earlier reading and down from the third quarter.
Factory orders are forecast to show a decline of 0.6 percent in January after gaining 1.1 percent in December.
Sorting through the economic news
Wednesday's biggest economic news, the Institute for Supply Management's gauge of the health of the services sector of the economy indicated that growth there remained robust last month, although not as robust as had been hoped for. The ISM services index slipped to 60.8 in February from 65.7 in January. Its employment index dropped to 52.7 from 53.4 in January. Readings above 50 suggest expansion in the services sector.
Monday's ISM reading on manufacturing was notable mostly for the fact that its employment component showed a rise from January. This seemed to give investors some hope that Friday's monthly payrolls data will be strong.
A recovery in the dollar versus other currencies and a decline in bonds and commodity prices, seemed to also suggest that a rise in payrolls could be brewing.
However, this has also caused concerns that if the labor market is finally recovering along with the rest of the economy, maybe the Federal Reserve will raise interest rates sooner than expected. Comments made by Fed chairman Alan Greenspan Tuesday that rates will need to return to a more stable state soon added to these concerns.
Investors seemed to take in stride the 2:00 p.m. ET release of the Fed's "beige book" report, a periodic look at economic conditions supplied by 12 regional Fed banks around the country. It noted some expanded economic activity and that employment was growing slowly, among other things.
What moved?
Although the shares closed barely lower, Walt Disney (DIS: down $0.11 to $26.65, Research, Estimates) was one of the session's big news stories after about 43 percent of shareholders at an annual meeting opposed the re-election of Chairman and CEO Michael Eisner to Disney's board. After the close, California's CalPERS, the biggest U.S. pension fund, also called for him to step down. For more on the story, click here.)
Among other stocks trading actively, semiconductors were weaker.
Intel (INTC: down $0.56 to $29.04, Research, Estimates) fell 1.9 percent ahead of its mid-quarter update, expected after the close of trade Thursday. Xilinx (XLNX: down $1.70 to $40.88, Research, Estimates) fell 4 percent after its mid-quarter update late Tuesday, in which the company said it expected results at the high end of its previous range -- disappointing investors who wanted the company to be even more bullish by raising its forecast, analysts speculated.
Other big cap technology stocks also fell on the Nasdaq, including Cisco Systems (CSCO: down $0.33 to $22.70, Research, Estimates) and Applied Materials (AMAT: down $0.48 to $21.19, Research, Estimates).
Web portal Mamma.com (MAMA: up $2.60 to $12.70, Research, Estimates) topped the Nasdaq's most active list for the second consecutive session, adding another 27.5 percent after rising almost 150 percent Tuesday. The small-cap company reported a narrower fourth-quarter loss versus a year earlier.
Strength in a few components kept the Dow from sliding.
McDonald's (MCD: up $0.47 to $28.89, Research, Estimates) gained 1.6 percent partly on a technical bounce as it edged near a new 52-week high and partly in response to news that the fast-food retailer will stop offering "super size" drinks and french fries by the end of the year.
Wal-Mart Stores (WMT: up $0.81 to $60.36, Research, Estimates) also gained 1.3 percent after the company boosted its annual dividend to 52 cents per share from 36 cents in the previous fiscal year.
Market breadth was negative. Losers narrowly outnumbered gainers on the New York Stock Exchange, where 1.32 billion shares traded. On the Nasdaq, decliners also barely edged advancers as 1.78 billion shares changed hands.
Treasury prices fell modestly. The 10-year note lost 2/32 of a point for a yield of 4.05 percent, up from 4.04 percent late Tuesday. Bond prices and yields move in opposite directions. The dollar continued to climb against major currencies.
NYMEX light sweet crude oil futures shed 86 cents to settle at $35.80 a barrel. COMEX gold fell $1.10 to settle at $392.70 an ounce.
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