- The Washington Times - Tuesday, May 20, 2008

NEW YORK (AP) — Wall Street closed mixed yesterday after weakness in the technology sector punctured some of the market’s enthusiasm over a report that suggested the economy could still be growing.

But comments from memory chip maker SanDisk Corp. about soft sales pulled stocks off their highs and sent tech shares lower. The Dow Jones Industrial Average, which had been up more than 100 points, ended well off its highs.

The Conference Board’s leading economic indicators report showed a 0.1 percent rise last month, after a similar uptick in March. The index, aimed at predicting economic activity in the next three to six months, bolstered investors’ convictions that the overall U.S. economy, while weak, is positioned for recovery.

After five months of declines in the leading indicators, some investors were concerned that March’s increase was an anomaly — so last month’s advance was met with relief, said Hugh Johnson, chief investment officer of Johnson Illington Advisors.

But technology shares tugged at the market after SanDisk issued its cautious comments at JPMorgan’s technology conference yesterday, said Neil Massa, senior trader at MFC Global Investment Management in Boston. SanDisk fell $2.42, or 7.5 percent, to $30.02.

SanDisk’s remarks came on a day of light trading and dented, but didn’t sink, an upbeat mood on Wall Street.

“Even though you’re up only 0.1 percent, it’s very good news that the declining trend may have been reversed,” Mr. Johnson said, referring to the leading indicators report.

The Dow rose 41.36, or 0.32 percent, to 13,028.16. The blue chips had been up nearly 150 points earlier in the session.

Broader stock indicators were mixed. The S&P; 500 advanced 1.28, or 0.09 percent, to 1,426.63, and the Nasdaq Composite Index fell 12.76, or 0.50 percent, to 2,516.09.

Government bond prices turned higher as the rally in stocks cooled. The yield on the benchmark 10-year Treasury note, which moves opposite its yield, fell to 3.84 percent from 3.85 percent late Friday.

The dollar rose against most other major currencies, while gold prices also climbed.

One pressure point for the economy — rising energy prices — appeared relatively in check yesterday. While many investors remain mindful of the rising price of oil and its effect on consumer spending, Wall Street seemed somewhat unfazed as oil advanced but didn’t top its record trading high that was set Friday. Light, sweet crude rose 76 cents to settle at a record $127.05 per barrel on the New York Mercantile Exchange. The price of a gallon of regular gasoline topped $4 for the first time in two U.S. metropolitan areas. Still, energy didn’t seem as large of a concern as in some recent sessions.

Financial shares also pulled back after the market came off its highs. Merrill Lynch & Co. fell $1.14, or 2.3 percent, to $47.71, while Lehman Brothers Holdings Inc. fell 85 cents to settle at $42.79.