Markets Lackluster as Silver Sinks

Shares on Wall Street fell slightly on Monday, failing to extend a rally that closed out a fourth consecutive week of gains on Friday.

The Standard Poor’s 500-stock index and the Dow Jones industrial average ended the day 0.1 percent lower. The Nasdaq composite was also 0.1 percent lower.

Smaller businesses were in the limelight Monday as the Russell 2000, an index of small-company stocks, rose above 1,000 points for the first time. The index is outpacing the Dow Jones industrial average and the Standard Poor’s 500-stock index this year. Small stocks are doing well because they are more focused on the United States, which is recovering, and are less exposed to recession-plagued Europe than the large international companies that make up the Dow and the S.P. 500 index.

Investors will be watching the Federal Reserve this week for clues about what it plans to do next with its economic stimulus program. On Wednesday the Federal Reserve chairman, Ben S. Bernanke, will appear before Congress and the central bank will release minutes of its most recent policy meeting.

The Fed is buying $85 billion of bonds every month to keep long-term interest rates low. That has encouraged investors to put money into stocks instead of bonds.

Policy makers are unlikely to cut back on stimulus just yet because economic growth is likely to slow in the second quarter, said Scott Wren, a senior equity strategist at Wells Fargo Advisors. As a consequence, Mr. Wren said, stocks are likely to continue to rise. “At some point, we will see some sort of a pullback, but it doesn’t seem like it’s going to be right now,” he said. “In the near term we’re probably going to trade a little bit higher.”

Earlier in the session, silver had fallen more than 7 percent, to $20.25 an ounce, its lowest level since September 2010. But by afternoon in New York, the price on the Comex had risen 0.4 percent, to $22.71.

The price of gold rose for the first day in eight, as the dollar fell. The precious metal climbed $21, or 1.5 percent, to $1,385, in the afternoon. Gold has slumped this month as its attraction as an alternative investment has faded this year as the dollar has appreciated.

In government bond trading, the yield on the 10-year Treasury note rose to 1.97 percent from 1.93 percent in the afternoon.

Yahoo’s board decided on Sunday to purchase Tumblr, the popular blogging site, for $1.1 billion. Yahoo’s stock was trading 1.3 percent higher.

In Europe, the FTSE 100 index of leading British shares ended the trading day 0.5 percent higher and remained near 13-year highs. Germany’s DAX, which has set a series of record highs, rose 0.7 percent. The CAC 40 in France gained 0.5 percent.

In Asia, stock markets had a strong start to the week. Japan’s Nikkei 225 index jumped 1.5 percent, while Hong Kong’s Hang Seng rose 1.8 percent. Benchmarks in mainland China also rose, but South Korea’s Kospi fell 0.2 percent.

Article source: http://www.nytimes.com/2013/05/21/business/daily-stock-market-activity.html?partner=rss&emc=rss