February 23, 2024

Stocks on Wall Street Trade in Narrow Range

In early morning trading, the Dow Jones industrial average fell 8.33 points, or .1 percent. The Standard Poor’s 500-stock index rose 1.99 points, or 0.2 percent. The Nasdaq was up 7.88 points, or 0.3 percent.

Overseas markets rose slightly Wednesday after a late-afternoon rally a day earlier. The FTSE 100 index of leading British shares was up 1 percent, while Germany’s DAX rose 0.7 percent. The CAC 40 in France was 1 percent higher.

Dell rose slightly in early trading on Wednesday. The computer maker reported its earnings after the market closed Tuesday, saying its quarterly net income nearly tripled after it cut costs and increased profit margins.

Target reported its earnings on Wednesday morning, saying that first-quarter net income rose 2.7 percent in spite of weak sales because of a strong credit card business. The report beat Wall Street expectations, but the stock was down 1.2 percent.

On Wednesday afternoon, the Federal Reserve will release minutes from its April meeting, giving traders insight into its expectations for inflation. At its previous meeting, the Fed said it would end its Treasury bond-buying program in June as scheduled, and indicated that it expected interest rates would remain low for some time.

The prevailing view in the markets is that the Fed will not begin to raise interest rates until later in the year at the earliest, in contrast to the European Central Bank, which has already raised its borrowing costs and is expected to do so again in July.

The divergence in the two banks’ policies is one reason the dollar has been so weak against the euro recently, though the reemergence of European debt worries have weighed on the euro over the past couple of weeks.

By early afternoon London time, the euro was 0.1 percent lower at $1.4221. That is still strong but 9 cents below the 18-month high achieved earlier in the month.

Jörg Krämer, chief economist at Commerzbank, predicted that the Fed would wait until early next year before raising interest rates again.

“Its main motive for this reticence is the high unemployment rate, which, even though it has been falling in recent months, is still very high,” Mr. Krämer said. “The only reason for the Fed acting at an earlier point would be if inflation expectations surprised and suddenly took off.”

Earlier in Asia, Japan’s Nikkei 225 index rose 1 percent on indications that factory production is recovering from the slump after the March 11 earthquake and tsunami.

South Korea’s Kospi climbed 1.6 percent while Hong Kong’s Hang Seng rose 0.5 percent and Australia’s S. P./ASX 200 inched up 0.2 percent.

Mainland China’s Shanghai Composite Index rose 0.7 percent, and the smaller Shenzhen Composite Index advanced 0.5 percent.

Benchmark crude for June delivery was up $1.96 to $98.87 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 47 cents to settle at $96.91 per barrel on Tuesday.

Tuesday, the Dow fell as much as much as 170 points before paring back its losses and closing down nearly 70 points. Commodity prices recovered Tuesday after floods damaged wheat, corn and soybean fields, helping in the United States stocks rally.

Concerns about the global economy and a lower earnings forecast by Hewlett-Packard had spooked markets. The company’s stock fell more than 7 percent. Industrial companies like Caterpillar and Boeing also fell after a surprisingly weak manufacturing report.

Europe’s debt crisis and uncertainty generated by the arrest of the International Monetary Fund’s chief, Dominique Strauss-Kahn, also hurt market sentiment this week.

Article source: http://www.nytimes.com/2011/05/19/business/19markets.html?partner=rss&emc=rss

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