Stocks Finish Mixed as Commodities Surge
NEW YORK (TheStreet) -- Stocks finished on a mixed note Monday as investors weighed Federal Reserve Chairman Ben Bernanke's gloomy economic outlook against expectations for a speedy resolution of the tax cuts debate in Washington.
The Dow Jones Industrial Average stuck to a tight trading range of a little more than 40 points for the session. After briefly turning positive late in the day, the blue-chip index closed 20 points lower, or 0.2%, at 11,362. The S&P 500 slipped nearly 2 points to 1223, while the Nasdaq Composite rose 4 points, or 0.1%, to 2595.
Meanwhile, commodities surged, with gold rising to a new record and silver vaulting to a 30-year high.Financial stocks were weak on Monday while the energy and basic material sectors were pockets of strength. Breadth was largely negative for the Dow with 20 of the index's 30 components losing ground. Bank of America (BAC) was the biggest blue-chip laggard, sliding nearly 2%.Cisco Systems (CSCO) was the biggest percentage gainer within the Dow after the stock was upgraded to outperform from perform at Oppenheimer. Other components on the rise included Pfizer (PFE), JPMorgan Chase (JPM) and Boeing (BA). "The equity market had a very nice run last week, and I think the market is experiencing some technical resistance, but there's a growing perception that we're going to get something from Washington either today or tomorrow," said Michael Strauss, chief economist and market strategist at Commonfund. Over the weekend, Republicans and Democrats neared a deal that would temporarily extend Bush-era tax rates for all income brackets in exchange for an extension of jobless benefits for millions of unemployed Americans. "The president is confident that, within the next couple of days or so, we will find a way to extend tax cuts for middle-class families and do some other things that the president thinks are important in helping grow the economy and create jobs," White House Spokesman Bill Burton said on Monday. Also over the weekend, Bernanke presented a dour view of the U.S. economy in an interview on CBS' "60 Minutes," saying that "it could be four, five years before we are back to a more normal unemployment rate, somewhere in the vicinity of say 5% or 6%." In the same interview, Bernanke acknowledged that an expansion of the central bank's $600 billion bond purchase program was a "possibility" that would depend on the plan's efficacy and inflation. Bernanke also sought to minimize concerns about inflation saying that the Fed's careful monitoring of the situation would ensure that it doesn't climb above 2%.
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