Stocks Finish Mixed as Bonds Slump


NEW YORK ( TheStreet) -- The major U.S. equity averages finished mixed in moribund trading Wednesday with volume once again running extremely light.

August has seen trading in stocks sink to the lowest levels in five years and Wednesday's session saw a similar lack of interest with just 2.65 billion shares changing hands on the New York Stock Exchange and 1.54 billion in play on the Nasdaq.

The Dow Jones Industrial Average was down 7 points, or 0.06%, to close at 13,165. The blue-chip index ranged less than 55 points on the day.

Winners edged losers within the Dow, 16 to 14. The biggest percentage gainers were American Express ( AXP), Bank of America ( BAC) Cisco ( CSCO) and United Technologies ( UTX).

Shares of Cisco were following up their 1.1% gain in the regular session with a 5% jump in after-hours action after the networker delivered an above-consensus quarterly profit and announced plans to raise its quarterly dividend by 75% to 14 cents a share.

Intel ( INTC), Kraft Foods ( KFT) and Merck ( MRK) were among the blue-chip losers.

Intel shares slumped after Warren Buffett's Berkshire Hathaway ( BRK.A) revealed in a 13-F filing it sold a stake in the chip giant, among other moves.

The S&P 500 added nearly 2 points, or 0.11%, to settle at 1405.53, while the Nasdaq gained 14 points, or 0.46%, to close at 3031.

Transportation was really the only strong sector in the broad market, while utilities, capital goods and basic materials were the only groups in the red. Winners finished ahead of losers by a 1.7-to-1 ratio on the Big Board and 2-to-1 on the Nasdaq.

Before the open, the Labor Department said the consumer price index was unchanged in July versus an unchanged reading in June. The core number, excluding the food and energy items, rose 0.1% after being up 0.2% in June. Economists surveyed by Thomson Reuters expected the headline CPI to rise 0.2% in July and the core number to stay at 0.2%.

At the same time, the New York Fed's Empire state survey showed that the general business conditions index weakened to negative 5.85 in August from 7.39 July.

"From a market standpoint, today's data works in favor of those believing the Fed is more likely to ease policy in coming months," said Dan Greenhaus, chief global strategist at BTIG. "Core prices appear to have topped out for now while headline prices have been pushing lower since the middle of 2011. The FOMC will not like that very much."

"The Empire Manufacturing survey is our first look at the manufacturing sector each month and in August, our first look was not good," he added. "The report isn't entirely negative per se but it's certainly broadly negative."

Meanwhile, the Federal Reserve said industrial production rose 0.6% in July, after increasing by a downwardly revised 0.1% in June, due to a weather-related 1.3% gain in utilities output and a 1.2% increase in mining output. Capacity utilization rose to 79.3% after increasing to 78.9% the month before. On average, economists had predicted that industrial production would rise 0.5% and that capacity utilization would rise to 79.2%.

The National Association of Home Builders/Wells Fargo Housing Market Index gained two points to 37 in August, showing that builder confidence in the market for newly built, single-family homes improved for a fourth straight month. This gain brings the index to its highest level since February 2007. Economists thought the index would stay at 35.

September crude oil futures settled up 90 cents at $94.33 a barrel and December gold futures added $4.20 to settle at $1,606.60 an ounce.

The benchmark 10-year Treasury was seeing another heavy decline, losing 21/32, raising the yield to 1.815%. The greenback was up 0.15%, according to the dollar index.

The FTSE in London finished down 0.54% and the DAX in Germany closed 0.40% lower.

The Hong Kong Hang Seng index closed lower by 1.18% and the Nikkei in Japan finished down 0.05%.

In corporate news Wednesday, Target ( TGT) shares rose 1.8% after the retailer raised its full-year guidance.

JDS Uniphase ( JDSU) shares surged more than 8% after the optical networker reported fiscal fourth-quarter non-GAAP earnings of $35.3 million, or 15 cents a share on revenue of $439.3 million. Analysts forecast a profit of 12 cents a share in the June-ended period on revenue of $422.6 million.

Shares of Staples ( SPLS) fell 15% after the office products company posted worse than expected quarterly results on soft demand in North America, Europe and Australia. The company has slashed its full-year earnings and sales projections.

Starbucks ( SBUX) shares gained 3.6% after Credit Suisse added the coffee company's shares to its U.S. focus list, saying it sees the stock as a compelling long-term growth story.

Deere ( DE) shares tumbled 6.3% after the manufacturer reported quarterly net income substantially missed analysts' estimates as it felt the pressures of a cooling world economy and the protracted U.S. drought.

The New York Times Co. ( NYT) named Mark Thompson as its next president and CEO. Thompson most recently served as director general of the British Broadcasting Corp. Shares rose 1.4%.


-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.

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