Stocks managed a tiny gain Wednesday, though reports of Middle East bombings touched off a late-session wave of selling.
“Equity markets continue to consolidate following last week’s run higher,” said Aaron Brown of Economy.com. Stocks have risen five of the last six trading days, interrupted only by Tuesday’s modest downturn.
On Wednesday the market opened slightly down, then moved solidly into positive territory on declining crude oil prices. Late in the afternoon, however, stocks gave back most of their gains as investors reacted to news of the attacks on hotels in Jordan.
The Dow Jones industrial average, which had been up as much as 62 points in the middle of session, ended the day with a gain of only 6.49, or 0.1 percent, to 10,546.21.
The index was burdened by a drop in General Motors, which fell 4.8 percent, to $24.63–not only a new 52-week low, but also the lowest price at which GM shares have traded in 13 years. Investors were worried by a report that the auto giant may face additional pension-funding obligations, as well as the prospect of a possible strike at its leading parts supplier.
Another blue-chip stock, McDonald’s, dropped 2 percent, to $33.33. But fellow Dow component Wal-Mart Stores rode lower oil prices to a 1.2 percent gain, to $48.20. The retail giant has been sensitive to this year’s high energy prices, because its generally lower-income customers lose crucial buying power when gasoline costs drain their disposable income.
Like the Dow, the broader Standard & Poor’s 500 index inched higher, rising 2.06, or 0.2 percent, to 1220.65. The technology-laced Nasdaq composite index increased 3.74, or 0.2 percent, to 2175.81. The typically more volatile Russell 2000 index of smaller companies moved up 3.60, or 0.5 percent, to finish at 659.83.
More Top Picks Best Book Lights For Night Reading
The lackluster market didn’t squelch the initial public offering of Israel-based memory chip-maker Saifun Semiconductor. On its first day of trading, the stock closed on the Big Board up 50 percent from its offering price, at $35.30.
Treasury securities fell, with the 10-year bond losing a hefty 21/32, to yield 4.65 percent. Some observers suggested that foreign bidders have displayed lower-than-normal interest in the first two of this week’s three U.S. government “refunding” auctions.
In New York Mercantile Exchange trading, crude oil for December delivery fell 78 cents, to $58.93 a barrel. While still painfully high by historical measures, that’s the lowest settlement price since late July. In the immediate aftermath of Hurricane Katrina’s blow to the Gulf Coast energy infrastructure, oil briefly traded above $70 a barrel.
In currency markets, the U.S. dollar strengthened
Big movers:
– Pow! Marvel Entertainment, the comic-book-character licensing company, watched its stock fall 22 percent, to a new 52-week low of $14.06, after the company reported disappointing quarterly profits and provided a gloomy 2006 revenue forecast.
– La Quinta shares surged more than 32 percent, to $10.89, after the hotel chain agreed to a $2.3 billion buyout bid from private-equity powerhouse Blackstone Group.
Local action:
– Navistar International declined 5.3 percent, to $26.18, after the Warrenville-based truckmaker said engine-related cost increases associated with meeting stringent new federal emissions requirements for 2007 will likely increase prices of its heavy-duty Class 8 trucks by as much as $10,000. Shares were trading above $42 as recently as March, but the stock has lost about 38 percent since then, in part because of weakening demand for Navistar’s medium-weight trucks.
– Closely held O’Connor & Co., a Chicago-based trade-clearing firm, agreed to be acquired by the merchant-banking unit of Fortis, a Belgian-Dutch financial concern. Financial terms weren’t disclosed. Under the accord, the European firm will blend its current Chicago clearing operation with that of the much larger O’Connor business.
———-