Investors cautiously bid stocks higher yesterday, pleased by growth in retail sales but wary of Federal Reserve Chairman Alan Greenspan's...
NEW YORK — Investors cautiously bid stocks higher yesterday, pleased by growth in retail sales but wary of Federal Reserve Chairman Alan Greenspan’s congressional testimony starting today.
The Dow Jones industrials and Standard & Poor’s 500 index reached 2005 highs. The Dow rose 46.19 to 10,837.32, its best close since Dec. 28.
The Dow is up 0.5 percent for the year.
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Microsoft, one of the 30 Dow stocks, showed no change at $25.93 a share, adjusted to reflect the first day it traded without the right to receive a dividend. Yesterday it closed at $26.01.
Boeing, also a Dow stock, gained 39 cents to $54.43.
Broader stock indicators were modestly higher. The S&P 500 was up 3.98 at 1,210.12, a year-to-date high, though the index is still down from 2004’s finish.
The Nasdaq composite index gained 6.30 at 2,089.21 but remained well off of its 2005 high. The Nasdaq and S&P 500 remain down for the year overall.
Wall Street welcomed the Commerce Department’s report that overall retail sales fell 0.3 percent in January, less than the 0.5 percent economists expected. Taking sluggish auto sales out of the equation, retail sales rose 0.6 percent, also better than expected.
Some investors, however, remained hesitant before Greenspan’s take on the economy and monetary policy, coming today and tomorrow on Capitol Hill. While most on Wall Street expect Greenspan to reiterate the Fed’s current stance, calling for measured interest-rate increases, some analysts think the markets’ recent gains may prompt Greenspan to sound a cautionary note.
“Greenspan has a history of using this meeting to try to curb the market,” said Bill Groenveld, head trader for vFinance Investments.
“I wouldn’t be surprised if you end up seeing him making a statement that we weren’t expecting. The way long-term rates are going, he may have to shake things up a bit.”
Volume was somewhat light because of concerns over Greenspan’s testimony, but some analysts took comfort in the fact that the major indexes did not give back the gains they had made over the past two weeks.
“You’ve had the market holding its ground in these slow days, and that could be encouraging to traders,” said Brian Williamson, equity trader with The Boston Company Asset Management.