NEW YORK – Stocks ended barely changed Thursday after a mixed set of data left investors concerned about the outlook for economic growth and the Federal Reserve's interest-rate policy.
The Dow Jones industrial average (search) closed up 13.85 points, or 0.13 percent, at 10,558.75. The Standard & Poor's 500 Index (search) rose 0.57 of a point, or 0.05 percent, at 1,227.73. The technology-laced Nasdaq Composite Index (search) was down 3.18 points, or 0.15 percent, at 2,146.15.
Blue chips edged higher, helped by a gain in McDonald's Corp. (MCD) shares , as investors bought the stock ahead of the restaurant chain's analyst meeting next week. McDonald's shares rose 3.4 percent to $33.45.
Investors were displeased when the Philadelphia Federal Reserve (search) reported a decline in almost every broad indicator it uses to measure the health of its region's manufacturing. The readings "suggest little to no growth this month," the report said.
The Labor Department (search) reported lower-than-expected inflation data, but gasoline prices jumped by the largest amount in 2 1/2 years and unemployment filings spiked. Roughly 68,000 Americans filed for unemployment last week due to Hurricane Katrina, the largest increase in nearly a decade.
Traders hope signs of a weakening economy will cause the Federal Reserve (search) to curb its year-plus streak of interest rate hikes when the central bank's Open Market Committee meets next Tuesday.
"A lot of investors are in a wait-and-see mode until we get the Fed behind us next Tuesday," said Arthur Hogan, chief market analyst at Jefferies & Co. "There's a real split between those who think the Fed will and should take a break and those who think it will continue" incremental rate hikes.
Crude oil futures fell. A barrel of light crude settled at $64.70, down 34 cents, in trading on the New York Mercantile Exchange (search).
Bonds fell sharply, with the yield on the 10-year Treasury note rising to 4.21 percent from 4.16 percent late Wednesday. The U.S. dollar was mixed against other major currencies in European trading. Gold prices were lower.
Both Hogan and Chris Johnson, manager of quantitative analysis at Schaeffer's Investment Research in Cincinnati, worried that some investors will be disappointed if the Fed raises rates next Tuesday.
"My fear here is that there truly are expectations that the Fed is done, that the game is over," Johnson said. "I don't think that's going to be the situation."
As a result, he said, "The boring market today, watching the paint dry, is the precursor to a little more weakness down the road."
Among the heaviest drags on the Nasdaq were shares of Research in Motion (RIMM), maker of the Blackberry handheld device, down 2.3 percent to $78.21, and chipmaker Altera Corp. which closed 2.6 percent lower at $18.97.
Time Warner Inc. (TWX) jumped after a source said the media company has been in talks with Microsoft Corp. (MSFT) over the past several months regarding Internet search and advertising networks but not a joint venture. Time Warner gained 3.2 percent to $18.50 on the New York Stock Exchange and was the biggest lift to the S&P 500 Index.
Shares of health insurer UICI (UCI) soared after private equity firms led by Blackstone Group agreed to acquire it for $37 per share in cash. . UICI rose 16.2 percent to $36.11 on the NYSE.
In company news, both Delta Air Lines Inc. (DAL) and Northwest Airlines Corp. (NWAC) filed for bankruptcy protection Wednesday, as expected. The carriers have been hurt by high fuel prices and labor problems. Delta rose 4 cents to 75 cents a share and Northwest fell 99 cents to 88 cents a share. The New York Stock Exchange is studying whether Delta should continue to be listed on the exchange.
Investment bank Bear Stearns Cos. (BSC) fell $2.60 to $102.90 after its third-quarter profit swelled 34 percent to easily beat Wall Street's targets but its revenue from the company's core bond segment declined slightly.
Google Inc. (GOOG) rose 53 cents to $302.62 after it said it would offer $4.18 billion in stock at $295 a share. The increase came despite the fact that the new offering will dilute current shareholders' value and the company has not specified how it will use the money.
The Russell 2000 index of smaller companies fell 0.93, or 0.14 percent, to 665.42.
Overseas, Japan's Nikkei stock average rose 1.19 percent. Britain's FTSE 100 rose 0.68 percent, Germany's DAX index fell 0.11 percent, and France's CAC-40 rose 0.20 percent.
Reuters and the Associated Press contributed to this report.