Updated from 4:20 p.m. EDT
Stocks endured a choppy session after a busy day of economic indicators and oil market news, but in the end, the major averages closed in positive territory.
Dow Jones Industrial Average
rose 19 points to 10,566, and the
added 3 points to 1207. The
gained 6 to 2075. The 10-year Treasury was down 1/32 in price, yielding 4.11%.
Volume on the
New York Stock Exchange
was 1.8 billion shares, while Nasdaq volume was almost 1.7 billion shares. Advancers led decliners by a 5-4 margin.
According to data released Wednesday by the Labor Department, the consumer price index fell 0.1% in May. Economists were anticipating a 0.1% increase. The core CPI, which factors out the volatile food and energy prices, was up 0.1%, less than expectations for a 0.2% rise. The numbers signaled inflation was contained.
Meanwhile, the Treasury Department said net foreign purchases of both domestic and foreign long-term securities from U.S. residents totaled $47.4 billion in April, compared with a revised $40.6 billion in March. The number was below expectations. Net purchases of Treasuries and corporate bonds fell, while foreign purchases of equities rose.
"The U.S. needs approximately $55 billion of inflows a month to offset the current account deficit," says Paul Mendelsohn, strategist at Windham Financial. "That means this is an alarming trend worth watching, because it will impact the dollar, interest rates and therefore stocks."
Separately, the Census Bureau said business inventories rose 0.3%. The consensus estimate called for a 0.4% increase. The
said industrial production was up 0.4%, ahead of estimates of a 0.2% rise, and capacity utilization was 79.4%, vs. expectations of 79.3%.
Crude oil futures rose 57 cents to $55.57 a barrel. OPEC agreed to raise its oil production quota by 500,000 barrels a day, a move that had been expected and is the fifth increase in the last year. Just a few hours after the OPEC move, the Energy Department said crude oil inventories fell by 1.78 million barrels -- a steeper drop than expected -- and gasoline inventories fell by 905,000 barrels, compared with the consensus view of a gain of 675,000 barrels. Distillate inventories rose more than anticipated.
"Stocks ran up to the top of their trading range after the tame inflation data," says Mendelsohn. "But in order to break through, you need stable, if not declining energy prices, and you are not getting that."
J.P. Morgan Chase
was one of the big corporate stories of the day, reaching an agreement in principle to settle a pending lawsuit brought on behalf of
security holders. According to the settlement terms, J.P. Morgan will pay $2.2 billion to the settlement class, the company said in a statement Tuesday. Shares were up 11 cents at $35.71.
reported earnings of $365 million, or $2.56 a share, for the second quarter, compared with $348 million, or $2.49 a share, in the same period a year ago. Net revenue for the quarter totaled $1.9 billion, up 9%. Bear's stock rose $1.01 to $101.34.
were down after the company lowered its production forecast for its flu vaccine; this will lead to weaker-than-expected earnings in 2005. Chiron fell $2.48 to $35.47.
Illinois Tool Works
added 4 cents to $82.45, despite cutting its earnings forecasts for the second quarter and the full year.
Elsewhere, a published report said
may unite its cable operation with America Online for an initial public offering next year. Time Warner was unchanged at $16.79.
World stock markets were mixed. London's FTSE 100 was down 0.5% to 5020, and Germany's Xetra DAX fell 0.9% to 4548. Japan's Nikkei rose 0.7% to 11,416, while Hong Kong's Hang Seng added 0.1% to 13,914.
To view Aaron Task's video take on today's market, click here