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Stocks jump as services sectors grow for 2nd month

November 05, 2009|Associated Press

NEW YORK — Stocks finished mixed Wednesday after an early burst of optimism faded despite a relatively encouraging assessment of the economy by the Federal Reserve.

The Dow Jones industrial average, up more than 150 points after the Fed news, closed up only 30 points. Broader indexes were narrowly mixed.

Gold prices pushed further into record territory, at one point nearing $1,100 an ounce.

Stocks could get a lift today from Cisco Systems, which after the bell posted better-than-expected earnings and sales. John Chambers, chief executive of the networking-equipment giant, struck an optimistic tone in a conference call with analysts, saying orders continued to rebound.

Shares of Cisco rose 1.5% in regular trading, and 3.5% in after-hours trading.

Analysts couldn't point to any one reason why stocks gave up their gains late Wednesday, but some said the market had been increasingly nervous with the approach of the government's October job-market report Friday.

Financial stocks fell hard in the last hour of trading after the House voted to push up the effective date of new rules for credit card companies.

The Fed left its benchmark interest rate unchanged at a record low of essentially zero and said the economy was slowly rebounding. Its announcement followed upbeat reports on service-sector activity and private employment.

The central bank once again said it would keep interest rates low for an "extended period." That eased some worries that rising prices would force the Fed to boost interest rates and risk cutting off a nascent economic recovery.

The Dow finished up 30.23 points, or 0.3%, to 9,802.14. The Standard & Poor's 500 index rose 1.09 points, or 0.1%, to 1,046.50. The Nasdaq composite index fell 1.80 points, or 0.1%, to 2,055.52.

Winning stocks outnumbered losers by 8 to 7 on the New York Stock Exchange.

The dollar fell against other major currencies.

Gold futures for November delivery climbed $2.40 to $1,086.70, a fresh record close, after trading as high as $1,097.40.

Oil futures added 80 cents to $80.40 a barrel as the government said U.S. crude supplies fell more than expected.

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