NEW YORK (AP) — Stocks closed mixed on Wall Street yesterday, with blue-chip shares edging lower as investors found little reason to recommit to the market before the beginning of the corporate earnings season and two key economic indicators expected this week.
Cash flowing into mutual funds helped prop up some sectors of the market, including technology shares. But on the whole, investors were holding back until reports today on December sales for major retailers and another report tomorrow on December employment.
The Dow Jones Industrial Average closed down 9.63, or 0.1 percent, at 10,529.03.
Broader stock indicators closed higher. The Standard & Poor’s 500 index edged up 2.66, or 0.2 percent, to 1,126.33, and the Nasdaq Composite Index rose 20.31, or 1 percent, to 2,077.68
“This is a fairly mild consolidation,” said Russ Koesterich, U.S. equity strategist at State Street Corp. in Boston. “We’ve had a good run since December, and the market needs some time to digest that ahead of the earnings season, which really gets under way in the next week or two.”
Part of the weakness in blue-chip shares yesterday was attributed to profit-taking following a consistent rise in blue-chip shares since late November, when the Dow Jones Industrial Average was hovering just above 9,600.
Technology shares went against the downward trend, gaining some ground on a bullish analyst report on Intel Corp. that lent support to semiconductor shares. Intel rose $1.09 to $33.99.
Some skittishness about the upcoming corporate earnings season was evident in the market yesterday as investors pushed the shares of Dow component Alcoa Inc. down 29 cents at $38.20 ahead of the company’s earnings report today.
Brian Pears, head equity trader at Victory Capital Management in Cleveland, said that what little support the market was getting came not from any solid news from earnings or economics but from the “January effect,” a seasonal flow of money into stocks and mutual funds.
“It’s more a question of liquidity than fundamentals,” Mr. Pears said. “We’re seeing some decent inflows to start the year. … Mutual fund managers aren’t being paid to manage cash right now, so we have to invest it.”
No major economic indicators came out yesterday, leaving the most recent reading on the economy a relatively poor showing for U.S. factory orders that came out Tuesday. Orders fell by 1.4 percent in November, the biggest decline in seven months, and a separate report showed slower-than-expected growth in the services sector.
Some traders were looking ahead with trepidation to the December employment report, the next major reading of the economy. An indication of poor job growth could suggest to investors that this key sector of the economy is still struggling.
Economists will get another important indicator of consumer-spending trends — also a key element of the economy — today when major retailers report sales for December.
Darden Restaurants Inc. plunged $1.88 to $19 after the Orlando, Fla.-based restaurant company reported sharply lower December sales at its Red Lobster unit. The company also said its president had resigned.
Biotechnology company Monsanto Co. was up $1.09 at $29.20 after reporting first-quarter operating earnings of 4 cents per share, beating Wall Street estimates of a penny per share.
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