(This story has been updated.)Wall Street ended narrowly mixed Wednesday as commentary from the last Federal Reserve meeting spooked buyers and threw cold water on what had been an explosive beginning to 2007. The Dow Jones Industrial Average swung in a 175-point range and ended up by 11.37 points, or 0.09%, at 12,474.52. Earlier, it set a new intraday record of 12,580.03. Ten of the index's 30 components finished in negative territory. After opening with a big jump, the S&P 500 weakened and lost 1.70 points, or 0.12%, to 1416.60. The Nasdaq Composite tacked on 7.87 points, or 0.33%, to 2423.16. The index was supported by advances in Sirius ( SIRI) and XM ( XMSR). "While the Dow continued to plow its way into new-high territory last week, the Nasdaq has flattened out," said Ken Tower, chief market strategist with CyberTrader. "There are other signs of declining upside momentum, as well. These first two trading days will provide important clues to the trend for the next few weeks." Volume improved greatly from last week, with more than 3.20 billion shares changing hands on the New York Stock Exchange. Decliners and advancers were matched evenly. Volume on the Nasdaq was roughly 2.47 billion shares, with losers barely edging winners. Stocks retreated after the 2 p.m. EST release of the Federal Open Market Committee minutes of its December meeting. At that gathering, policymakers left the fed funds target rate, the rate banks use to charge each other interest for overnight loans, at 5.25%. That was the fourth consecutive time that the Fed had met without increasing rates.
The minutes indicated that members of the FOMC judged that "readings on core inflation had improved modestly since the spring, nearly all participants viewed core inflation as uncomfortably high and stressed the importance of further moderation." While most members agreed that the Fed's statement should continue to convey that inflation risks were still the greatest concern, "one member did not favor language that referenced only the possibility of additional policy firming and believed that, although the risks to inflation remained the predominant concern, the statement should emphasize that policy could be adjusted in either direction depending on the evolution of the outlook for inflation and economic growth." Phillip Roth, chief technical market analyst with Miller Tabak, said that the Fed's message within the December meeting's minutes was cryptically negative, leaving stocks exposed in an overbought condition. "It's pretty clear that people are disappointed that the Fed is talking about being vigilant," Roth said. "The market is much more extended and people are committed, so we're much more overbought and vulnerable." U.S. stocks hadn't traded since Friday after being closed Monday for the New Year's holiday and Tuesday for the funeral of former President Gerald Ford. The Dow ended its last session at 12,463.15, down 38.37 points, or 0.31%. The S&P slipped 6.43 points to 1418.30, and the Nasdaq gave up 10.28 points to 2415.29.
Even so, the major indices had big years for the bulls, as the Dow rose 16.3%, the S&P 500 gained more than 13%, and the Nasdaq added 9.5%. Shares of Dow component Home Depot ( HD) finished higher after the company said Chairman and Chief Executive Bob Nardelli has resigned. The home-improvement retail chain said the decision was mutual. Nardelli will be replaced by Vice Chairman Frank Blake. Home Depot closed the session up 91 cents, or 2.3%, at $41.07. Also in corporate news, Wal-Mart ( WMT) said during the extended weekend that December same-store sales are expected to have climbed 1.6% from year-ago levels. The forecast is well above the previous estimate of a 1% rise. Wal-Mart gained $1.37, or 3%, to $47.55. Warnings from Lennar ( LEN) and Nabors Industries ( NBR) weren't dampening the mood, even though their weak forecasts meant a glum kickoff to the preannouncement season. Earnings reports for the fourth quarter of 2006 will begin to appear in earnest in about two weeks. Elsewhere, RR Donnelley ( RRD) said it would buy book printer Von Hoffmann for $412.5 million in cash. The stock rose 68 cents, or 1.9%, to close at $36.22. The economic calendar included a delayed report on December manufacturing from the Institute for Supply Management, which showed an increase to 51.4 from 49.5, above the consensus 50.0.
Ian Shepherdson, chief economist with High Frequency Economics, said that investors shouldn't cheer the better-than-expected ISM figure too much. "Overall, this is still a weak survey, despite the improvement from November, and we expect the downward trend to re-emerge in the first quarter," said Shepherdson. "It does not mean the downtrend in the ISM, in place since the spring of last year, is over." Also on the economic docket, construction spending dipped 0.2% in November, compared to expectations of a 0.6% decline. October construction spending was revised to a 0.3% downtick from the previously reported 1%. Wednesday also brought December sales results from automakers. DaimlerChrysler ( DCX) said that auto sales dipped 1% for the month, while Ford ( F) said vehicle sales fell 12.8%. Elsewhere, GM ( GM) said sales fell 9.6%, while Toyota ( TM) reported a 12.3% rise in auto sales. DaimlerChrysler rose 1% and Toyota was higher by 0.7%. Meanwhile, GM slumped 4.1% and Ford finished unchanged. Crude futures dropped to their lowest level in 18 months as mild weather in the U.S. is believed to have boosted inventory levels. The Energy Department will release its weekly inventory report on Thursday, a day later than usual. The February oil contract plummeted $2.73 to close at $58.32 a barrel.