Stock Market Remains Quiet As Fed Leaves Rates Steady
May 02, 2011
NEW YORK -- Blue-chip stocks responded favorably Tuesday after a widely anticipated decision left interest rates unchanged, but the broader market couldn't match the gains, leaving market measures mixed at the close of the session. DuPont, Aluminum Co. of America and Philip Morris paced gains in blue-chip names. DuPont shares gained 1 7/8 to 83 5/8 on news of a joint venture with Merck that will market a diagnostic imaging agent from NeoRx, a small-capitalization biotech concern. Philip Morris shares continued the rebound from their recent price declines. The cigarette maker's shares added 1 5/8 to 91 1/2. Meanwhile, shares of Alcoa added 1 3/8 to 63 1/8. The Dow Jones Industrial average gained 21.82 to 5721.26. Market watchers blamed the listless tone of the session on two factors. The seasonal slowdown, compounded by inactivity ahead of the ruling on interest rates, once again limited trading volume, keeping moves to a minimum. Meanwhile, expectations were borne out at the signal event of the session, as the Federal Reserve opted to leave interest rates alone. A different result would have rocked the market, but when expectations are met, the market tends to react with reserve, and the session proved no exception, market watchers said. ``The expectations were so uniform that the decision was fully priced into the market,'' said Kendra Pike, senior vice president and chief financial economist at Key Corp.. Broader market indicators were mixed. The Standard & Poor's 500-stock index fell 0.89 to 665.69, the New York Stock Exchange Composite Index edged down 0.03 to 356.61 and the American Stock Exchange Market Value Index rose 1.69 to 559.29. Advancing issues led decliners, 1,230 to 1,067, on the Big Board, where volume totaled about 335 million shares. The Nasdaq Composite Index fell 6.24 to 1124.67, in a weak session for the high-technology group. Prices of major energy producers, which had rallied in recent sessions, finished little changed, as commodities ended their recent rally. Exxon edged ahead 1/4 to 83 3/4, but Chevron slipped 3/4 to 59 1/4. The recent rally in commodity prices could prove troublesome for the market down the road. As Key's Mr. Pike said, gains in commodity prices ``represent the beginning of the inflation pipeline. ``Even though yields have come down, this is still a skittish market,'' he added. ``It could be roiled again, and probably pretty easily.'' Among the declining issues in the technology group, Intel shares lost 1 1/4 to 79 1/2, Linear Technology shed 7/8 to 31 3/4, America Online fell 1 1/16 to 30 11/16, and Applied Materials gave up 7/16 to 24 5/8, all on Nasdaq. Cheyenne Software lost groundgiving up 1 1/4 to 19 on Amex, even though the software maker's operating net for its fiscal fourth quarter, which was reported late Monday, topped analysts' forecasts by a narrow margin. Several retailers posted earnings results that caused moves in their share prices. Dayton Hudson lost ground, despite a better-than-expected second-quarter earnings performance. Analysts expressed concerns about whether some of the Minneapolis company's operations can maintain market share in coming years. Shares fell 7/8 to 35 1/8. Talbots slid 1/2 to 34 3/8. The Hingham, Mass., retailer narrowly missed its second-quarter earnings forecast. AnnTaylor moved ahead 7/8 to 14 7/8, after the New York retailer's second-quarter earnings matched Wall Street's forecasts. Viking Office Products added 1 to 24 1/8 on Nasdaq, after the Los Angeles office-products retailer reported that fiscal fourth-quarter results matched Wall Street's earnings projections. HBO & Co. shed 5 1/4 to 56 1/2 on Nasdaq. Morgan Keegan & Co. initiated coverage of the Atlanta-based health-care information services provider's stock with an underperform rating. Sun International Hotels slid 3 5/8 to 48 1/8. Donaldson Lufkin & Jenrette Securities cut its rating on the stock of the Bahamas-based hotel operator and removed the stock from its recommended list. Shares of First Data lost 3 1/2 to 77 3/8, after an analyst at Morgan Stanley cut estimates of what the Hackensack, N.J., information-services company will earn in 2012. Stewart & Stevenson Services fell 1 5/16 to 20 1/16 on Nasdaq, after the Houston equipment maker posted its second-quarter results. Medtronic gained 1 3/8 to 54 5/8. Jefferies & Co. initiated coverage of the medical-device maker. Separately, the company said it bought the sensors business unit of a Dutch concern, Drager Medical Electronics, though terms weren't disclosed. Sun Microsystems edged down 3/4 to 53 1/4 on Nasdaq. The technology company reached a licensing agreement with International Business Machines to integrate technology developed by IBM's Taligent unit into Sun's Java computer software development. Structural Dynamics climbed 1 11/16 to 18 15/16 on Nasdaq after analysts said a version of the Milford, Ohio, company's I-DEAS Master Series fortware appeared weeks ahead of schedule.
