Stocks up narrowly despite bad news
Stocks finished a lackluster session slightly higher Tuesday as many investors opted to keep to the sidelines after a disappointing report on retail sales and another increase in oil prices.
With Hurricane Ivan threatening oil rigs in the Gulf of Mexico, crude futures moved higher for the second straight day. A barrel of light crude settled at $44.39, up 52 cents, on the New York Mercantile Exchange.
Sluggish automotive sales resulted in a 0.3 percent drop in retail sales for August, worse than the 0.1 percent economists had expected. However, when auto sales were removed from the equation, sales were actually up slightly for the month — though not enough to completely assuage Wall Street’s concerns or encourage most investors to make new buys.
“People are very hesitant to make mistakes. To make a commitment right now, it’s like being in a life raft out in the middle of the ocean by yourself,” said Michael Murphy, head trader at Wachovia Securities in Baltimore. “Until we get some good news, it’s just going to be like this. People looking for reasons not to buy stocks.”
The Dow Jones industrial average was up 3.40, or 0.03 percent, at 10,318.16.
Broader stock indicators were also narrowly higher. The Standard & Poor’s 500 index gained 2.51, or 0.2 percent, to 1,128.33, and the Nasdaq composite index was up 5.02, or 0.3 percent, at 1,915.40.
While the overall retail sales report from the Commerce Department was disappointing, diffusing the positive momentum from July’s 0.8 percent increase, the reading was better once auto sales were removed. Without them, retail sales rose 0.2 percent for the month, in line with Wall Street’s expectations.
However, with consumers unwilling to spend on big-ticket items like cars, Wall Street was concerned that they remained nervous about the economy and may cut their spending further.
“It’s no mystery that consumers are spending more on energy and fuel costs, and that’s started to filter down,” said Scott Wren, equity strategist for A.G. Edwards & Sons. “What this boils down to is we need something that’s going to encourage consumers and help drive spending. We need to see better job growth and a better overall economy.”
Declining issues outnumbered advancers by nearly 5 to 4 on the New York Stock Exchange, where preliminary consolidated volume came to 1.54 billion shares, compared with 1.61 billion on Monday.
The Russell 2000 index of smaller companies was down 2.14, or 0.4 percent, at 570.96.
Overseas, Japan’s Nikkei stock average rose 0.4 percent. In Europe, Britain’s FTSE 100 closed down 0.3 percent, France’s CAC-40 dropped 0.5 percent for the session and Germany’s DAX index slipped 0.1 percent.