- The Washington Times - Monday, September 18, 2006

NEW YORK (AP) — Stocks gave up a moderate early advance to close barely changed yesterday after oil prices rebounded from their recent decline, rising as much as $1 a barrel.

Investors also moved to the sidelines to wait for tomorrow’s Federal Reserve meeting on interest rate policy. Wall Street had been flirting with 2006 highs, but the market remains anxious about the possibility the Fed could raise its benchmark short-term rate, which is now at 5.25 percent. Readings of economic growth and inflation remain mixed; the rise in oil carries with it concerns that inflation will accelerate.

The energy and materials sectors were the day’s winners.

The Dow Jones Industrial Average fell 5.77, or 0.05 percent, to 11,555.00.

Broader stock indicators were basically unchanged after also retreating. The Standard & Poor’s 500 index rose 1.31 to 1,321.18, and the Nasdaq Composite Index rose 0.16, or 0.01 percent, to 2,235.75.

The day’s economic news was cheerless. The Commerce Department said America’s deficit in the broadest measure of foreign trade increased in the spring to the second-highest level in history, reflecting a big jump in payments for foreign oil. The current account deficit rose to $218.4 billion in the April-June quarter, an increase of 2.4 percent over the deficit the first three months of the year.

The current account is the broadest measure of foreign trade because it covers not only trade in goods and services but also investment flows between countries. The deficit represents the amount the United States must borrow from foreigners to cover the shortfall between exports and imports.

Bonds fell, with the yield on the 10-year Treasury note at 4.81 percent, up from 4.79 percent Friday. The U.S. dollar was mostly lower. Gold prices rose.

Crude-oil futures rose. A barrel of light crude settled at $63.80, up 47 cents on the New York Mercantile Exchange after earlier rising more than $1.

Freescale Semiconductor Inc., a maker of cell-phone chips, rose $2.10 to $39.26, a 5.65 percent increase, on news it would be bought by a private equity consortium in a $17.6 billion cash deal.

Ford Motor Co. fell 20 cents to $7.82 after its departing chief operating officer, Anne Stevens, told the Detroit Free Press Sunday, “The company has too many layers, the company is too bureaucratic and it takes too long to get things done.” Ford said Friday it would offer buyouts to 75,000 union workers.

Hewlett-Packard Co. rose 22 cents to $36.40, continuing to rise despite new revelations about its leak probe.

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