Stocks Close Near Flat Line

Updated from 4:13 p.m. EDT

Stocks stayed near their opening levels throughout the session Wednesday, and when it was all done, the major averages closed mixed. But neither gains nor losses were particularly eye-catching.

The Dow Jones Industrial Average fell 11.74 points, or 0.11%, to 10,587.93. The S&P 500 added 0.27 points, or 0.02%, to 1213.88, while the Nasdaq Composite rose 0.96 points, or 0.05%, to 2092.03.

"The market is trying to get some sense of direction after a lack of economic news," said Robert Pavlik, portfolio manager with Oaktree Asset Managment. "The concern over oil and what earnings season will hold makes the market climb a wall of worry, forcing it to take clues from commodity prices."

About 1.76 billion shares changed hands on the New York Stock Exchange, with advancers beating decliners by a 10-to-7 margin. Trading volume on the Nasdaq was 1.67 billion shares, with advancers and decliners even.

In other markets, the 10-year Treasury bond jumped 26/32 in price, dropping the yield to 3.94%, while the dollar was higher against the yen and euro.

The dollar gained early after the minutes from the Bank of England's meeting this month, which showed two officials voting for a rate cut on concerns that growth probably will be weaker than the central bank forecast.

"The biggest news driving yields lower was the outcome of minutes of the Bank of England meeting," says John Canavan, market analyst with Stone & McCarthy Research Associates. "They voted to keep rates unchanged on the heels of yesterday's rate cut in Sweden, and there were also two dissenting votes to drop rates by 25 basis points. It's sparking a lot of speculation about what's going on in Europe, and you're seeing the effect in the bond yields."

Oil trading was choppy Wednesday. The newly benchmarked August crude contract fell 95 cents to close at $58.09 a barrel in Nymex floor trading, despite the Energy Department's report that said crude stocks fell by 1.6 million barrels for the week ended June 17. Gasoline inventories increased by 200,000 barrels, while distillate stocks added 1.3 million barrels for the week.

"I don't think the market is convinced that $60 won't impact bottom-line earnings," added Pavlik. "There's still a potential to impact earnings, maybe not immediately, but certainly going forward."

Stronger sectors Wednesday included energy, technology, semiconductors, banks and brokerages. Weaker areas included autos, health care, and homebuilding.

For the second time this year, Ford(F) has cut its 2005 earnings outlook, blaming worse-than-expected sales of SUVs. The automaker also said it expects to eliminate 5% of its workforce, totaling 1,700 jobs. Moody's Investment Services also raised the possibility of downgrading the Baa3 long-term rating of Ford, as well as the Baa2 rating for Ford Motor Credit. The stock fell 49 cents, or 4.4%, to $10.68.

Ford's decline pressured General Motors'(GM) stock, making it the largest decliner on the Dow. Shares lost $1.09, or 3%, to $34.82. Auto-parts suppliers Visteon(VC) and Delphi(DPH) traded in sympathy, down 3.6% and 4.2%, respectively.