Market Snapshot
Dow rises; Nasdaq, S&P 500 slip on data
NEW YORK (MarketWatch) -- Blue-chip stocks posted a slight gain Thursday as most stocks finished lower after economic reports from the U.S., China and the euro zone did little to curb concerns about the world economy.
"China is slowing and Europe I would argue is already in a recession," said T. Doug Dale, chief investment officer of Security Ballew Wealth Management in Jackson, Miss.
"Any objective investor would understand what has been causing stock rallies is not fundamentals, but central-bank intervention," Dale said.
The Dow Jones Industrial Average
(DJIA)
closed up 18.97 points, or 0.1%, at 13,596.93, with
The S&P 500 index (SPX) shed 0.79 point, or less than 0.1%, to close at 1,460.26, with industrials hardest hit and consumer staples faring best among its 10 sectors.
The Nasdaq Composite index (COMP) declined 6.66 points, or 0.2%, to close at 3,175.96.
For every stock rising, nearly two fell on the New York Stock Exchange, where about 678 million shares traded by the close. Composite volume topped 3.3 billion, just under the average daily trading volume for September.
"Nobody has a clear understanding of where the data is going to take us," said Chip Cobb, portfolio manager at BMT Asset Management. "It's a very benign recovery, and we all want it to be quicker, more sustainable and more defined, but the reality is we have a weak employment market and maybe a stabilization in the housing market," he said.
"The bottom line is corporate America is still doing what it needs to do. It's mean, lean and strong, and we have unbelievably better balance sheets than a couple of years ago," Cobb added.
On the New York Mercantile Exchange, oil futures (CLV2) fell 11 cents, or 0.1%, to $91.87 a barrel, while gold futures (GCZ2) retreated $1.50, or 0.1%, to $1,770.20 an ounce.
Yellow-light district
Wall Street's cautious tone, which has had indexes moving in a limited range all week, has much to do with how far it has already climbed, with the S&P 500 up nearly 16% so far in 2012, 7% during the current quarter and 3.6% in September.
"I'm more cautious now equity-wise, not because I think the fundamentals have changed, but the third is usually the worst quarter, and September is usually our worst month, and clearly we're having the opposite of that, so I'm cautious," said Cobb.
The unusually strong third quarter is not unlike 2007, said Dale at Security Ballew Wealth Management: "If we look at 2007 for a proxy for how to play the rest of the year, when it peaked in 2007 it peaked in October, then the rest of the year traded sideways or down, but was still up for the year."
Weak data on the U.S. labor front followed reports illustrating slowing growth in China and Europe, with figures from the Labor Department showing first-time jobless claims fell by 3,000 last week to 382,000, slightly above the 375,000 estimated by economists polled by MarketWatch. See: Jobless claims show little improvement.
"The U.S. economy is likely to remain resilient to the global economic slowdown but may be stuck at below-average growth going into next year," wrote Gary Thayer, chief macro strategist at Wells Fargo Advisors Services Group.
Separately, the Conference Board reported its leading economic index fell 0.1% in August, while a longer-term trend remained positive. See: Leading economic indicators tick lower in August.
And, the Federal Reserve Bank of Philadelphia said manufacturing in the region improved modestly in September, with its business-conditions index rising to negative 1.9 from negative 7.1 in August. See: Manufacturing in Philadelphia area contracts.
"Economic activity is mixed. Some sectors are doing well while others are weak. What was strong during the early part of the economic recovery is getting weaker now and what was weak is getting stronger," noted Thayer at Wells Fargo.
U.S. equities on Wednesday gained after sales of existing American homes climbed more than projected and the Bank of Japan hiked its asset-purchase goal.
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