Stocks struggle after Fed rallyMajor gauges mixed as investors show caution after previous run; Motorola slides; oil jumps.NEW YORK (CNNMoney.com) -- Technology stocks skidded and the broader market was mixed Thursday afternoon as investors eyed rising oil prices and Motorola's profit warning - one session after the big Federal Reserve-fueled rally. The Dow Jones industrial average (up 14.02 to 12,461.54, Charts) and the broader S&P 500 (up 0.95 to 1,435.99, Charts) index both added a few points with less than two hours left in the session. The Nasdaq (down 4.54 to 2,451.38, Charts) composite lost 0.2 percent. 
All three major gauges surged Wednesday after the Fed opted to hold a key interest rate steady at 5.25 percent, as expected, and seemed to hint the bank was more likely to cut rates than raise them in the near term. After the advance stock investors are "a little hesitant today," said Peter Cardillo, chief market economist at Avalon Partners. "Yesterday's euphoria was maybe a little overdone, with the market interpreting the statement as implying a rate cut is on the horizon," Cardillo said. "But that may not be the case, as they were pretty tough on inflation." Another big factor in Thursday's session: the run up in oil prices, which boosted energy stocks and dragged on airlines and other transportation companies. U.S. light crude oil for May delivery jumped $1.49 to $61.10 a barrel, a gain of more than 2 percent, on the New York Mercantile Exchange. Late Wednesday, Motorola warned that it will post a first-quarter loss and that full-year sales will miss forecasts, owing to weak sales of mobile devices. The company also said its chief financial officer would retire effective April 1. Motorola (down $1.18 to $17.56, Charts) shares slid over 5 percent Thursday. Palm (down $1.64 to $17.81, Charts) slumped too on bets that Motorola's problems make it less likely the mobile phone maker will buy the handheld device maker, as has been rumored. On Thursday morning, KB Home (Charts) said profits tumbled 84 percent, reflecting the slowdown in the housing market. Nonetheless, the homebuilder's earnings per share topped analysts' forecasts and the stock rose. The rise in crude oil prices gave a lift to energy stocks including Exxon Mobil (up $1.35 to $74.58, Charts), Sunoco (up $1.22 to $70.61, Charts) and ConocoPhillips (up $1.81 to $68.98, Charts). The Amex Oil (up 23.14 to 1,206.42, Charts) index added 1.8 percent. In other news, News Corp. (down $0.02 to $24.78, Charts) and GE (up $0.29 to $35.77, Charts)-owned NBC Universal said they are creating an online video site that will seek to compete with Google (up $1.90 to $458.45, Charts)'s YouTube. Market breadth was negative. On the New York Stock Exchange, losers beat winners 8 to 7 on volume of 1 billion shares. On the Nasdaq, decliners edged advancers by a slim margin on volume of 1.24 billion shares. Investors also eyed the weekly jobless claims report, which showed a surprise decline. A separate report, the index of leading economic indicators, declined 0.5 percent in February after sliding 0.3 percent in the previous month. Economists surveyed by Briefing.com thought it would fall 0.3 percent. Treasury prices slumped, raising the yield on the 10-year note to about 4.60 percent from 4.54 percent late Wednesday. Bond prices and yields move in opposite directions. In currency trading, the dollar fell versus the euro and rose modestly versus the yen. COMEX gold for April delivery added $3.90 to $663.90 an ounce. Subprime: the risk to Wall Street |
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