Stocks flat after weak economic data
NEW YORK - Wall Street closed narrowly mixed Monday as investors wrestled with record-high commodities prices and data that pointed to a continually weakening economy.
Investors have been trying to determine whether recent pessimism about the economy has been well-founded or overwrought. The Institute for Supply Management's index of U.S. manufacturing activity came in Monday at 48.3 — indicating a milder contraction than the 48.1 the market expected, but still, its lowest level in nearly five years.
Furthermore, the Commerce Department reported that construction spending in January fell by 1.7 percent, the steepest amount in 14 years.
"The two economic numbers that came out today were still rather on the negative side and they point to further weakness in economic activity," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc.
But rising commodities prices — although they threaten to eat into consumers' discretionary spending — encouraged Wall Street to pour money into energy, metals and mining companies. Crude oil surged to a record near $104 a barrel before settling up 61 cents at $102.45, while gold soared to a record near $1,000 an ounce. Silver, corn and soybean prices also hit all-time highs.
The Dow Jones industrial average — after slumping more than 100 points briefly during afternoon trading — finished down 7.49, or 0.06 percent, to 12,258.90.
Broader stock indicators were mixed. The Standard & Poor's 500 index rose 0.71, or 0.05 percent, to 1,331.34, while the Nasdaq composite index fell 12.88, or 0.57 percent, to 2,258.60.
Bond prices pulled back Monday after jumping amid Friday's stock market losses. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.55 percent from 3.53 percent late Friday.
Mining and energy companies were big winners in the stock market Monday. Coeur d'Alene Mines Corp. rose 34 cents, or 7.1 percent, to $5.16; Harmony Gold Mining Ltd. rose $1.08, or 8.9 percent, to $13.22; and Massey Energy Co. rose $3.34, or 8.7 percent, to $41.60.
Commodity prices soared as the dollar hit a fresh low against the euro.
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