Stocks finished mixed Thursday, as the market consolidated the gains of the previous session. Uncertainties over the economic impact of Hurricane Katrina in the upcoming quarter weighed against speculation that the Fed will end its series of rate hikes, and that rebuilding efforts will boost the economy.
The Dow Jones industrial average fell 21.97 points, or 0.21%, to 10,459.63. The broader Standard & Poor's 500 index rose 1.26 points, or 0.10%, to 1,221.59. The tech-heavy Nasdaq composite index lost 4.19 points, or 0.19%, moving to 2,147.90.
After spending the day hovering in the $69 per barrel range, oil settled up 53 cents at $69.47 a barrel. Refinery outages are still considerable, says Action Economics, and gasoline prices should continue to rise in coming days.
The Institute of Supply Management's manufacturing index slipped to 53.6 in August, coming in well below the median forecast of 57.0. The number falls short of the strength found from the Empire State and Philadelphia Federal Reserve Board indexes, but is healthier than the Chicago PMI report, which came in earlier in the week, says Action Economics.
U.S. personal income rose 0.3% in July, falling short of median estimates. Overall spending was up 1.0%, led by a strong rise in vehicle purchases. Disposable income rose by 0.3%, while the savings rate fell by 0.6%.
Initial jobless claims in the U.S. rose by 3,000 to 320,000 in the week that ended Aug. 27. This is not expected to have much effect on the markets Thursday, as it doesn't yet give a picture of the number of jobless claims following the hurricane.
In corporate news, several retailers posted monthly sales figures. Gap (GPS) saw 9% lower same-store sales in August, and 5% lower total sales on slightly lower merchandise margins.
Department store-chain Target (TGT) reported 6.3% higher same-store sales for the month of August, with total sales coming in 12% higher.
Retailing giant Wal-Mart (WMT) posted 3.3% higher same-store sales for the month of August, and 10% higher total sales. The company also said it expects to see 2%-4% higher same-store sales in September.
Neiman-Marcus Group (NMG.A) posted 8.2% higher same-store sales in August, on a 6.7% rise in revenue.
August auto sales were mixed. General Motors (GM) sales in August came in weaker than expected, declining 13% from last year. Meanwhile Chrysler and Ford F reported year-over-year sales increases of 5% for light vehicles. Overall, however, total vehicle sales are now expected to fall a total of 20% in August to 16.6 million units, says Action Economics.
Ten-year Treasury yields continued to fall as stocks headed lower, and more traders headed for a safety bid, and traders speculated that Greenspan would put a halt to future rate hikes. The yield on the benchmark 10-year note was lower at 4.02%.
European stock markets finished higher Thursday. London's Financial Times-Stock Exchange 100 index was up 31.60 points, or 0.60%, to 5,328.50.
Germany's DAX index rose 13.25 points, or 0.27%, to 4,842.94.
In Paris, the CAC 40 index gained 24.79 points, or 0.56%, moving to 4,424.15.
Asian markets finished higher on Thursday. Japan's Nikkei 225 index rose 93.37 points, or 0.75%, to 12,506.97.
In Hong Kong, the Hang Seng index rose 240.20 points, or 1.61%, to 15,143.75.