US stocks flat on cloud of worries
NEW YORK—US stocks closed flat Tuesday, with sentiment dampened by data showing slower growth in the crucial services sector, rising oil prices, an interest rate hike in China and moves by the Federal Reserve.
The Dow Jones Industrial Average slipped 6.13 points (0.05 percent) to 12,393.90, while the tech-rich Nasdaq Composite rose 2.00 points (0.07 percent) to 2,791.19.
The broad-market S&P 500-stock index eased back 0.24 point (0.02 percent) at 1,332.63.
Traders digested news that the Federal Reserve edged toward ending years of ultra-loose monetary policy in the face of a building US recovery and looming inflation fears.
Minutes from the latest Federal Open Market Committee policy meeting showed members discussed ending long-standing policies, including ultra-low interest rates, aimed at restoring economic growth after the 2007-2009 recession.
“Investors may be waiting on first-quarter earnings for direction,” said Scott Marcouiller of Wells Fargo Advisors.
“The market received no help from the Fed today. Stocks gave up early gains after minutes of the last Fed meeting showed policy makers were divided on how to end their bond-buying program.”
The markets also sagged a bit after the Institute for Supply Management said the services sector expanded in March for the 16th straight month, but its key index fell to 57.3 percent from 59.7 percent, sign of a slower pace.
Survey respondents said they were concerned about how Japan’s massive March 11 earthquake-tsunami disaster was affecting the supply of parts and materials from Japan, and also said they were worried about the rise of fuel prices.
Clothing chain Abercrombie & Fitch picked up 10.8 percent after giving analysts a bullish revenue forecast and declaring plans to open stores in China.
Merger and acquisition activity kept investor interest piqued. California snacks group Diamond Foods snapped up Procter & Gamble’s popular Pringles brand in a $2.35 billion deal, its second big foray into the chips market in as many years.
The deal will boost Diamond’s revenues from $825 million last year to a projected $2.4 billion, the company said.
Diamond added 6.7 percent while P&G lost 0.95 percent.
Bond prices fell. The yield on the 10-year Treasury rose to 3.49 percent from 3.43 percent late Monday, while that for the 30-year bond increased to 4.51 from 4.49 percent.
Bond prices and yields move in opposite directions.
