NEW YORK – Stocks ended mixed Wednesday as jumping oil prices and a lower reading on manufacturing activity chilled an early spate of bargain-hunting. Technology stocks rose on a rebound in Intel's shares.
The Dow Jones industrial average (search) closed down 5.38 points, or 0.05 percent, at 10,168.54 and the Standard & Poor's 500 Index (search) ended up 1.77 points, or 0.16 percent, at 1,106.01. The tech-heavy Nasdaq Composite Index (search) ended up 12.28 points, or 0.67 percent, at 1,850.38.
The first rise in oil prices after seven sessions of declines added an element of gloom to a market already made sluggish by lackluster trading. Government data showed a steep drop in U.S. oil inventories last week as imports fell and refiners continued to operate at unusually high rates, sending light crude for October delivery soaring $1.78 to $43.90 on the New York Mercantile Exchange (search).
High oil prices generally weigh on stock prices because of their impact on companies' profit margins and consumers' pocketbooks.
Underscoring how exaggerated market moves can be when volume is light, the major indexes sank at midday on reports of a possible terror attack in Washington, D.C. The market stabilized after it became clear the incident stemmed from the accidental release of pepper spray in a restaurant near the World Bank and International Monetary Fund, which are under heightened alert. Despite that, Wall Street never fully regained its momentum.
"When you combine the rise in oil prices with the false-alarm bioterrorist alert, both of those events really took the steam out of the market," said Michael Sheldon, chief market strategist at Spencer Clarke LLC.
Shares of Boston Scientific Corp. (BSX) helped the S&P 500 to end up by advancing about 7 percent after the medical device maker said it had regained market share and was planning a share buyback.
With trading light, as it has been all week due to the Republican National Convention and the upcoming Labor Day holiday, the markets were slow to react to the Institute for Supply Management's (search) manufacturing index for August. Manufacturing activity rose for the 15th consecutive month, suggesting healthy activity in the sector, but the reading of 59 was three points lower than the one recorded for July, and fell short of economists' expectations.
Many market participants were looking ahead to Friday, when the Labor Department was to release its data for August. After two months of anemic employment growth, Wall Street is hoping for a stronger labor market.
"The market really needs to see some positive economic statistics, and we haven't been getting them lately," said Brian Williamson, an equity trader at The Boston Company Asset Management. "The next few days are going to be critical to see where we stand, and to see whether or not we're in an economic soft patch ... or if we're in a slump."
Sagging monthly sales figures from the nation's two largest automakers offered little encouragement. General Motors Corp. (GM) lost 10 cents to $41.21 and Ford Motor Co. (F) declined 21 cents to $13.90 after the companies said production cuts could dent fourth-quarter profits.
Intel Corp.'s (INTC) midquarter report was expected to highlight what's ahead for the tech sector. While there has been some concern that a negative outlook from the chipmaker would weigh heavily on tech shares, a round of analyst downgrades and lowered forecasts spurred speculative buying, leading analysts to surmise that investors may have already factored in a mediocre forecast. Intel ended the day up 14 cents at $21.43.
Other semiconductor stocks rose as well, despite downgrades that reflected continued weakness throughout the sector. WR Hambrech cut its third-quarter earnings targets for chip equipment maker Teradyne Inc.(TER), while Janney Montgomery Scott cut ON Semiconductor Corp. (ONNN) to a "hold" from a "buy." But investors nonetheless saw opportunities to buy. Teradyne gained 24 cents to $13.11, while ON Semiconductor rose 5 cents to $3.03.
Boston Scientific gained $2.02 to $37.75 despite cutting its outlook for third-quarter and fourth-quarter earnings. Dell rose 63 cents to $32.47 while Cisco was 33 cents up at $19.09. The August CIO Magazine Tech Poll, held monthly in association with a Prudential Equity Group strategist, said information technology spending continued to be robust.
August sales reports were expected Thursday from the nation's largest retailers. Among those reporting early, Wendy's International Inc. (WEN) gained 89 cents to $35.26 after posting strong sales despite 100 temporary restaurant closures due to Hurricane Charley and other storms. Same-store sales, those from restaurants open at least a year, rose 2.8 percent, the company said.
Advancing issues outnumbered decliners by about 7 to 4 the New York Stock Exchange, where volume came to 332.5 million shares, compared with 271.47 million at the same point on Tuesday.
Trading was moderate, with 1.1 billion shares changing hands on the New York Stock Exchange, below the 1.4 billion daily average for last year. About 1.4 billion shares were traded on Nasdaq, below the 1.69 billion daily average last year.
Advancers outnumbered decliners on the NYSE by about 2 to 1, and on Nasdaq by about 3 to 2.
The Russell 2000 index of smaller companies was up 2.77, or 0.5 percent, at 550.70.
Overseas, Japan's Nikkei stock average finished 0.4 percent higher Wednesday. In Europe, France's CAC-40 rose 0.5 percent, Britain's FTSE 100 added 1 percent and Germany's DAX index climbed 0.9 percent.
Reuters and the Associated Press contributed to this report.