The market traded mostly down through the day as gloomy prospects for the United States economy continued to weigh on equities.
But at the close, the Standard Poor’s 500-stock index rose 6.29 points, or 0.50 percent, to 1,260.34. The Dow Jones industrial average was up 29.82 points, or 0.25 percent, to 11,896.44, and the Nasdaq rose 23.83 points, or 0.89 percent, to 2,693.07.
Over the last seven days, the Standard Poor’s 500-stock index had shed more than 6 percent in its longest string of declines since October 2008 — eight days — reacting to government data on the economy and perceptions that the debt ceiling agreement hammered out in Washington this week would do little if anything to help.
Markets also fell in Asia and Europe, where officials tried to address growing investor concerns about the sovereign debt crisis.
The markets have been beset by bad data in recent days even as investors were riding the turbulence set off by the drawn-out negotiations over the debt ceiling. Recent reports on the nation’s gross domestic product and consumer spending have done little to ease the outlook ahead of Friday’s report on unemployment.
On Wednesday, another indicator showed expansion in the services sector was slowing down. The Institute for Supply Management index for the non-manufacturing sector of the United States economy declined to 52.7 in July, the lowest level since February 2010. While the report noted that business activity had picked up, there was lower consumer and business demand.
Adrian Cronje, the chief investment officer of Balentine, said that as concerns persisted about the euro zone and the United States economy, investors were starting to turn their focus to whether the debt ceiling deal’s cuts could create further headwinds for growth and whether earnings, one of the few bright spots, could be sustained.
“People are really taking a step back and saying, ‘How long can this period of record corporate profits continue?’ ” he asked. “There is very little room now to stimulate the economy if it continues to underperform expectations.”
In addition, the debt ceiling deal has not completely removed doubts about the impact on the credit rating. “Bonds are see-sawing on whether there still could be a potential downgrade,” he said.
The yield on the benchmark 10-year Treasury yield was about even with Tuesday at 2.61 percent.
In Europe, euro zone countries were grappling with the effects of the sovereign debt troubles.
Yields on the bonds of the most indebted countries have eased a bit. But analysts have cited unresolved issues in the rescue package announced last month for Greece, which was meant to bolster the other weak euro zone economies as well, as a main contributor to the renewed pressure in European bond markets.
The president of the European Commission, José Manuel Barroso, announced Wednesday that he had written to national leaders urging them to “send an unambiguous signal of the euro area’s resolve” by speeding up enactment of the commitments they made last month.
That meeting announced a plan to include private bondholders in the rescue of indebted nations as well as extending the power of a European bailout fund, known as the E.F.S.F.
“The necessary technical work to implement the measures agreed on 21 July is already under way and will be completed as a matter of urgency,” he said. However, he noted that “implementation of some of these measures will also require actions by national parliaments,” which he said should be made “without delay.”
Many European parliaments, however, are already preparing for their monthlong summer break. In Rome, for example, the summer break starts Thursday and the body will reconvene Sept. 12.
Italy has been at the center of the latest storm, with its bond yields pushing higher amid investor fears that its weak growth and high debt levels may bring a full-blown fiscal crisis.
Bettina Wassener contributed reporting.
Article source: http://www.nytimes.com/2011/08/04/business/global/daily-stock-market-activity.html?partner=rss&emc=rss