Markets Mixed

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The New York Sun

– Wall Street turned mixed today as investors awaited more word from Federal Reserve officials to offer insight into the central bank’s plans following a dismal employment report Friday.

The market advanced in early trading, but the gains weren’t broad and were quickly lost. Many banks, retailers and homebuilders fell due to ongoing nervousness about the housing market’s drag on the economy.

There is little economic data due Monday, but San Francisco Fed President Janet Yellen, Dallas Fed President Richard Fisher and Fed Governor Frederic Mishkin are slated to speak at various events. Investors will be keen to learn their perspectives on the health of the economy and for any hints as to what the central bank might do when it meets September 18.

Atlanta Fed President Dennis Lockhart said early today investors should consider Friday’s unemployment report alongside a mostly strong batch of retail sales reports seen recently. And over the weekend, Philadelphia Fed Chief Charles Plosser said in reference to Friday’s payroll number that the Fed’s Open Market Committee doesn’t make rate decisions based on any one number, according to Dow Jones Newswires.

For many investors, a rate cut after more than a year of the Fed standing pat on rates is inevitable. The debate, as they see it, is whether the Fed will reduce rates by a quarter percentage point or a half percentage point.

The Dow Jones industrial average rose 16.10, or 0.12 percent, to 13,129.48.

Broader stock indexes fell. The Standard & Poor’s 500 index lost 1.10, or 0.08 percent, 1,452.45, and the Nasdaq composite index was down 4.66, or 0.18 percent, at 2,561.04.

The market appeared a bit steadier after a sell-off on the jobs report that sent the Dow down 250 points, but still unsure about the direction of the economy. While some investors had hoped for weakness in the report to help the Federal Reserve justify cutting interest rates when it meets next week, the market was shocked by a loss in jobs when a gain had been expected.

Bonds were little changed, with the yield on the benchmark 10-year Treasury note at 4.37 percent, the same as late Friday.

The dollar slipped against most other major currencies, while gold prices, which have risen sharply in recent weeks amid concerns about the strength of the American dollar, rose to fresh multiyear highs. A rate cut by the Fed could hurt dollar-denominated assets, prompting some investors to shift into gold.

The rise in the stock market today follows a week in which the major indexes all lost more than 1 percent due to Friday’s retrenchment. The Labor Department’s report that August payrolls fell, marking the first monthly decline in four years, further depressed a market already uneasy about a lackluster housing market, tightening availability of credit and a rise in mortgage defaults. The drop in payrolls stirred concerns of a recession.

With consumer spending accounting for about two-thirds of economic activity, Wall Street is concerned about any drop in employment that would make consumers hesitant to spend.

Giving some technology stocks a boost, Intel Corp. rose 23 cents to $25.70 after raising its sales outlook, and Advanced Micro Devices Inc. rose 15 cents to $12.75 after releasing its newest microprocessor.

Also, Apple Inc. rose more than 2 percent after selling its 1 millionth iPhone yesterday.

The market absorbed more news of fallout from mortgage failures. Countrywide Financial Corp. said after the closing bell Friday it would cut as many as 12,000 jobs — up to 20 percent of it work force — as the mortgage lender tries to ride out upheaval in the mortgage industry. The company expects new mortgages to fall 25 percent next year.

Countrywide fell 71 cents, or 4 percent, to $17.50.

Light, sweet crude fell 86 cents to $75.84 per barrel on the New York Mercantile Exchange.

The Russell 2000 index of smaller companies was down 0.63, or 0.08 percent, at 775.16.

Overseas, Japan’s Nikkei stock average fell 2.22 percent. In afternoon trading, Britain’s FTSE 100 was up 0.15 percent, Germany’s DAX index was down 0.12 percent, and France’s CAC-40 was up 0.08 percent.

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On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com


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