Stocks churned their way to nowhere Thursday, as inflation fears continued to keep traders gloomy.
The only discernible trend was investors’ renewed interest in the tech sector. That allowed the technology-heavy Nasdaq composite index to eke out a modest gain, but the other major indexes ended the day almost exactly where they started.
“The equity market was not altogether successful in ending the losing streak that has characterized quarter four,” noted market-analysis firm Briefing.com, adding that traders found little reason Thursday to challenge the “thick air of pessimism” that has hung like a pall over Wall Street since the start of October.
The Dow Jones industrial average slipped less than a third of a point, to 10,216.59–a move so small that the blue-chip barometer officially changed 0.00 percent.
The broader Standard & Poor’s 500 index also spun its wheels, declining less than 1 point, or 0.07 percent, to 1176.84.
The Nasdaq composite index, fueled by a surge of interest in recently unpopular technology stocks, rose 9.75, or 0.48 percent, to end the day at 2047.22.
Even after Thursday’s uptick, however, the Nasdaq remains down 4.8 percent for the month. The S&P 500 index is 4.2 percent lower, and the Dow is off 3.3 percent.
The October sell-off, which has been particularly harsh on small-cap companies, reflects investors’ growing belief that the Fed isn’t as close to ending its interest-rate-tightening effort as many had previously thought.
Still, Mark Toledo, president of Evanston-based Total Portfolio Management, cautions against reading too much into the market’s dour recent performance.
A two-week-long downdraft such as the one that has hit equity markets, he said, naturally “elevates the concern over whether something fundamental has changed” in the investing climate.
But, he contends, over the past two weeks there simply “hasn’t been a fundamental change in the factors that affect the stock market and bond market on a long-term basis.”
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The yield on the benchmark 10-year treasury note has moved inside a range of 3.7 percent to 4.7 percent over the past two years, and there’s little to suggest it will move above that upper limit any time soon.
As a result, Toledo says, “on a valuation basis the stock market is OK … and prospects for the stock market in the last part of this year and the first months of next year are fine.”
The price of Treasury securities weakened again Thursday, pushing their yields higher. The 10-year note dropped 5/32, to yield 4.47 percent, up from Wednesday’s 4.45 percent.
Oil prices moved significantly lower, as crude for November delivery dropped $1.04 to $63.08.
Among the blue chips, Johnson & Johnson gained 3.6 percent, to $64.02, and McDonald’s shares rose 1.2 percent, to $32.05, after the fast-food giant reported stronger-than-expected September sales results.
Among Nasdaq companies, Apple Computer shares strengthened by 9.1 percent, to $53.74, suggesting growing investor enthusiasm for the new iPod version the company unveiled Wednesday.
Local action: Chicago Mercantile Holdings shares were off by more than 10 percent at one point Thursday because of investor worries that the exchange might be hurt by the problems that have engulfed scandal-tainted derivatives broker Refco. But by day’s end, the stock had partially recovered, and closed down just 2.7 percent, at $310.40.
– Richardson Electronics shares rose 8.5 percent, to $7.41, after the LaFox-based manufacturer reported earnings Wednesday evening.
– Exelon shares, which have been under pressure all week as investor ardor for the utility sector cools, dropped 2.9 percent, to $47.08. But even though the Chicago utility’s stock has declined 9.5 percent through this week’s first four trading sessions, Exelon shares remain 30 percent higher than their level of 12 months ago.
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