Stocks Muted in Rally's Wake

Wall Street is little changed following three days of gains.
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Updated from 4:22 p.m. EDT

Stocks in the U.S. spent the entire session near the flat line Thursday as traders digested their gains of the last three days and continued to ponder the next moves of the

Federal Reserve

.

The

Dow Jones Industrial Average

was up 13.62 points, or 0.11%, at 12,461.14, and the

S&P 500

edged down half a point, or 0.03%, at 1434.54. The

Nasdaq Composite

slipped 4.18 points, or 0.17%, to 2451.74.

"There's a bit of consolidation today as investors evaluate yesterday's large advance and the implications from the FOMC statement," said Michael Sheldon, chief market strategist with Spencer Clarke. "Given the fact that bond yields are down and oil up almost $2 a barrel, it's impressive that the markets have held in there without much profit-taking."

About 3.10 billion shares changed hands on the

New York Stock Exchange

, and volume on the Nasdaq reached 1.92 billion shares. Winners and losers tied.

Energy-related subindices were among the winners of the day. The Amex Oil Index rose 1.6%, the Philadelphia Oil Service Sector Index added 1.5%, and the NYSE Energy Index gained 1.3%.

Elsewhere, the Philadelphia Housing Sector Index fell 0.9%. Also on the losing side, the Philadelphia Semiconductor Sector Index eased 1.3%, and the Philadelphia/KBW Bank Index slipped 0.8%.

For the first three days of the week, Wall Street had closed uniformly higher. First a string of mergers was responsible, then it was fairly solid housing news, and on Wednesday the driver was the hope that the Fed might push interest rates lower this year.

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During the previous session, stocks were sluggish until the two-day Fed meeting wrapped up, and that spurred the Dow to a 1.3% gain and the Nasdaq to a 2% climb. The Fed ignited the prior day's advance by leaving its target fed funds rate unchanged and removing comments about possible "additional firming" from its policy statement.

Though the central bank warned that core inflation measures have been somewhat elevated, and it expressed concern about weakness in housing, traders focused on the notion that any more rate increases aren't even on the Fed's radar.

After 17 consecutive hikes between mid-2004 and last June, the fed funds target has been steady at 5.25% for six meetings.

Treasury prices sank, as the 10-year note was down 13/32, yielding 4.59%. The 30-year bond lost 30/32 to yield 4.78%.

Commodities prices surged. The front-month May crude contract jumped $2.08 to $61.69 a barrel. Natural gas tacked on 16 cents at $7.32 per million British thermal units. Gold was up $4.20 to finish at $664.20 an ounce, and silver was higher by 16 cents at $13.48 an ounce.

On the corporate side,

Motorola

(MOT)

shed 6.6% a day after saying that it would post a first-quarter loss and fall short of analysts' sales targets by a wide margin. Motorola finished down $1.24 at $17.50.

Homebuilder

KB Home

(KBH) - Get Report

lost ground after reporting a first-quarter profit of $27.5 million, or 34 cents a share. While earnings topped the Thomson First Call consensus, results were down 83% from a year ago, and the stock fell 54 cents, or 1.1%, to close at $47.25.

On the research front, Bear Stearns upgraded

Procter & Gamble

(PG) - Get Report

to outperform from peer perform, citing valuation. Meanwhile, JPMorgan reduced both

GlaxoSmithKline

(GSK) - Get Report

and

AstraZeneca

(AZN) - Get Report

to underweight from neutral.

Procter & Gamble rose 1.4% to $63.85. GlaxoSmithKline was off 1.4% at $55.48, and AstraZeneca ended down 2.2% at $55.45.

Away from equities, the Labor Department said initial jobless claims fell by 4,000 to 316,000 last week. The less-volatile four-week moving average also declined, dropping by 3,750 to 326,000.

Additionally, the Conference Board said its February index of leading indicators fell 0.5%, slightly below expectations. January's figure was revised to a decline of 0.3% from a rise of 0.1%.

Overseas markets were higher. Tokyo's Nikkei 225 rose 1.5% to 17,419, and Hong Kong's Hang Seng added 0.9% to 19,690. London's FTSE climbed 1% to 6318, and Frankfurt's Xetra DAX jumped 2.2% to 6857.