Major U.S. stock indexes closed flat Wednesday in light trading, showing little reaction to Federal Reserve Chairman Alan Greenspan's comments to the Senate, according to Standard & Poor's MarketScope. Treasuries fell, as investors interpreted Greenspan's comments as a sign that the Fed might raise interest rates.
On Wednesday, the Dow Jones industrial average lost 2.44 points, or 0.02%, to close the day at 10,834.88. The broader Standard & Poor's 500 index gained 0.22 points, or 0.02%, to 1,210.34. The Nasdaq composite index lost 1.78 points, or 0.09%, to 2,087.43.
Looking ahead to Thursday, among the companies reporting earnings are discount retailers Wal-Mart (WMT ) and Target (TGT ).
In economic news Thursday, initial jobless claims for the week ended Feb. 12 are expected to jump to 320,000 from the previous week's reading of 303,000.
On Wednesday, investor attention was focused on Greenspan's testimony before the Senate Banking Committee. Greenspan told the Senate that core inflation was low and the official Fed funds rates "fairly low"
In other economic news, U.S. housing starts unexpectedly rose 4.7% to 2.159 million in January, a nearly 21-year high. Economists had been forecasting a decrease of 4.3 percent from the original December number of 2.004, which was also revised upward to 2.063 million.
Also Wednesday, the index of industrial production came in weaker than expected. The number was unchanged in January, following a downward revision in December to a 0.7% gain from a 0.8% gain. Economists were expecting industrial production to increase by 0.4% in January.
Crude oil futures rallied in the late afternoon and finished the day 2.41% higher at $48.40. Expectation for demand pressures, the possibility of an OPEC production cut in March and colder weather forecasts in the U.S. northeast lifted the price, according to Informa Global Markets.
In earnings news, soft-drink giant Coca-Cola (KO ) posted a better-than-expected 30% increase in fourth-quarter net income, but said it was not satisfied with its performance for the year. The company posted net income of $1.2 billion compared with $927 million during the period in the previous year, while revenue increased to $5.26 billion from $5.18 billion. It stock gained 1%.
Computer data storage maker Network Appliance (NTAP ) reported higher quarterly earnings but a lower-than-expected outlook for the current quarter's revenue. Income for the fiscal third quarter rose to $60.1 million, from $40.2 million in the period last year. Its stock fell 8%.
Treasuries fell sharply in price, following reports that Greenspan was optimistic about economic growth and said the official Fed funds rate "remains fairly low." The yield on the 10-year note at the end of the day was 4.16%.
European stock markets closed lower Wednesday. In London, the Financial Times-Stock Exchange 100 fell 11.00 points, or 0.22%, to close at 5,047.90. BHP Billiton's boost after it announced it doubled net profit in the first half of the year was offset by declining companies such as Scottish Power and GlaxoSmithKline.
Germany's DAX index was down 33.26 points, or 0.76%, to close at 4,368.77. Car stocks suffered as data showed car sales slipped, with VW and BMW among the decliners.
In Paris, the CAC 40 index dropped 21.43 points, or 0.53%, to close at 4,009.02. Banks weighed down the index.
Asian markets closed mixed Wednesday. Japan's Nikkei-225 index fell 44.81 points, or 0.38%, to close at 11,601.68, after a report showed that Japan's GDP unexpectedly shrank 0.5% last quarter, putting the economy into recession.
Hong Kong's Hang Seng gained 19.66 points, or 0.14%, to close at 14,014.49.