Wall Street gave up a substantial early gain and staggered to a mixed finish yesterday after a Federal Reserve official warned that interest...
NEW YORK — Wall Street gave up a substantial early gain and staggered to a mixed finish yesterday after a Federal Reserve official warned that interest rates might continue to climb.
The Dow Jones industrial average rose 16.04 to 10,483.07.
Microsoft, one of the 30 Dow stocks, gained 14 cents to close at $25.51 a share. Boeing, also a Dow stock, fell 27 cents to $65.28.
The Nasdaq, which had been up more than 1 percent, lost 8.60, or 0.4 percent, to 2,067.16, while the S&P 500 fell 0.25 to 1,197.26.
The Dow had surged more than 111 points before Federal Reserve Bank of Atlanta President Jack Guynn said in a speech that the Fed’s Open Market Committee was not yet ready to stop its policy of modest rate increases. Guynn’s comments set off profit-taking.
It was an earlier, bullish assessment of the economy from Fed Chairman Alan Greenspan, given in a speech broadcast at a meeting of central bankers in Beijing late Monday, that triggered the initial advance. Greenspan said the economy would remain strong and intimated that the Fed could soon stop raising interest rates, at least for the short term.
With seemingly dueling comments from the Fed committee members, investors remained confused as to whether the economy was headed for a harsh slowdown and whether the Fed would continue raising interest rates through the summer.
“The cross currents here are nothing like I’ve ever seen,” said Brian Pears, head equity trader at Victory Capital Management in Cleveland. “There’s a lot of confusion and uncertainty over everything — the dollar, interest rates, oil, all sorts of things.”
Oil prices slid for a second straight session, with a barrel of light crude quoted at $53.76, down 73 cents, on the New York Mercantile Exchange.
Despite the lower oil prices and Greenspan’s remarks, analysts said there wasn’t enough fundamental strength — or trading volume — to support the early gain even before Guynn’s remarks.
“We had a nice rally this morning off of Greenspan’s comments, but we were really just up on fluff,” said Todd Leone, managing director of equity trading at SG Cowen Securities. “There’s not a lot of money flowing into the market, and when we hit the top of our range, we just bounced off it.”
head equity trader at Victory Capital Management