Stocks sagged yesterday in a bout of profit-taking, but blue chips fared better than they might have as shares of Dow component Hewlett-Packard...
NEW YORK — Stocks sagged yesterday in a bout of profit-taking, but blue chips fared better than they might have as shares of Dow component Hewlett-Packard surged after the ouster of Chief Executive Carly Fiorina.
The Dow fell 60.52 to 10,664.11.
Microsoft, one of the 30 Dow stocks, slipped 17 cents to close at $26.07 a share. Boeing, also a Dow stock, gained 87 cents to $54.12.
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The broader gauges were also lower. The Standard & Poor’s 500 index declined 10.31 to 1,191.99. The Nasdaq composite index skidded 34.13 at 2,052.55.
The robust performance of HP shares gave the Dow Jones industrial average a bit of a lift, but it was not enough to keep the index in positive territory. Oil prices were volatile as government inventory data showed lower-than-expected fuel supplies, and Treasuries rallied. Analysts were not overly alarmed by the day’s trading, however, saying some pullback in stocks was to be expected after the market’s advance last week.
“Oil is definitely factoring in … but let’s also take into account that the market has seen a nice little snap back during February after what can only be described as a dismal January,” said Bryan Piskorowski, market analyst at Wachovia Securities. “To a certain extent, the market is using the oil figures as a reason to do some profit taking, and the dollar is lower, so that’s rolled together to pare some recent gains.”
Oil prices rebounded briefly after the government’s weekly inventory figures showed a surprising 1 million-barrel drop in crude inventories; analysts had expected a build of 730,000 barrels. By afternoon, the rally fizzled, however. Crude futures settled up 6 cents at $45.46 a barrel on the New York Mercantile Exchange after trading as low as $44.60 a barrel and as high as $46.40. Meanwhile, the U.S. dollar fell against other major currencies.
A run-up in Treasuries also may have worked against stocks, analysts said, noting that the yield on the 10-year note had slipped below 4 percent for the first time in more than three months, to 3.98 percent. Some of the buying was linked to the government’s auction of $15 billion in five-year notes, but bonds had been moving higher, perhaps due to Atlanta Federal Reserve President Jack Guynn’s suggestion in an interview with The Wall Street Journal that the group might need to change its policy statement as it adjusts the pace of interest-rate increases.
“Why are we seeing strength in bonds here? It could be the bond market is anticipating a period of slower economic growth going forward, which could mean earnings estimates may be too optimistic and need to be adjusted lower,” said Richard Cripps, chief market strategist for Legg Mason of Baltimore. “It’s not what you would expect, with the Fed raising interest rates. I think that disconnect is troubling to some stock investors.”
Hewlett-Packard soared 6.9 percent, or $1.39, to $21.53, after the abrupt departure of Fiorina.