Stocks ended mixed on Wednesday as investors weighed a sharp drop in oil prices against a jump in consumer-level inflation in February.
The Dow Jones industrial average was off 14.49 points, or 0.14%, to 10,456.02. The broader Standard & Poor's 500 index added 0.82 points, or 0.07%, to 1,172.53. The Nasdaq composite index gained 0.88 points, or 0.04%, to 1,990.22.
Looking ahead to Thursday, investors will examine a report on orders for big ticket items in February. Durable orders are seen ticking up 0.5% in the month vs. a decline of 1.3% in January. Meanwhile, new home sales for February are expected to rise to a 1.16 million annualized pace from a 1.106 million pace in the previous month.
Among the companies due to report on Thursday is Darden Restaurants (DRI ), the name behind the Red Lobster and Olive Garden chains, and food producer ConAgra (CAG ).
Crude oil fell nearly $2.22 Wednesday to around $53.81 a barrel following an inventory report showing greater-than-expected supplies.
The lower energy prices were cause for some relief after news earlier in the session that the consumer price index for February rose 0.4% on the month, while core reading, which strips out volatile food and energy prices, was up 0.3%. Expectations were for a 0.3% headline rise, with core up 0.2%, according to Informa Global Markets.
Service prices gained 0.3%. This formerly worrisome component, which makes up nearly 60% of CPI, has been somewhat better behaved of late, while goods prices have taken up the slack. On a year-over-year basis, headline CPI is up 3.0%, same as in January, while core in up 2.4%, vs. 2.3% a month earlier.
The CPI spike came a day after the Fed boosted the federal funds rate by a quarter-percentage point to 2.75% as expected but also warned that "pressures on inflation have picked up in recent months".
In a seprate economic report, U.S. existing home sales slowed 0.4% in February to a 6.79 million unit annualized pace vs. expectations of something around 6.70 million. Informa Global Markets says the numbers reveal a healthy rise in homes offered for sale, which is positive for the market.
In Wednesday's market, large-cap stocks in the pharma, chip, and biotech groups rebounded from recent losses, buoying the S&P 500 and Nasdaq. Rate-sensitive, energy, abd basic materials stocks fell.
Tech bellwether Oracle (ORCL ) reported its quarterly profit fell 15%, but raised its fiscal 2005 EPS guidance slightly.
Also in tech news, software giant Microsoft (MSFT ) was told by the European Union that its proposal to have a non-partisan trustee help monitor EU-imposed sanctions was not acceptable.
Payroll processor Paychex (PAYX ) - news) posted 15% higher third-quarter profit thanks to strength in its payroll, human resources and benefits product lines.
In merger news, telephone company MCI's (MCIP ) board is set to meet to talk about the most recent takeover offer from Qwest (Q ), the Wall Street Journal reported.
XM Satellite Radio was helped after Hyundai said the company's radios would be standard on all of U.S. automobile models by 2007.
Treasuries were mostly higher in price Wednesday as commodities prices dipped, thus calming some inflation fears. The yield on the 10-year note finished at 4.61%.
European stock markets closed lower on Wednesday. London's Financial Times-Stock Exchange 100 index was off 26.90 points, or 0.54%, at 4,910.40 on weaker than expected March CBI monthly trends survey. Final revised fourth quarter GDP rose 0.7%.
Germany's DAX index lost 3.49 points, or 0.08%, to 4,317.20 on an Ifo institute report that its business confidence index surprisingly fell to 94, the lowest since September, 2003, from a revised 95.4 in February. Deutsche Lufthansa was up a bit after the company agreed to buy Swiss International Air Lines.
In Paris, the CAC 40 index eased 14.77 points, or 0.36%, to 4,032.41 in reaction to the U.S. slide yesterday on higher interest rates and on some nervousness as European Union leaders hold their spring summit in Brussels.
Asian markets closed lower. In Japan, the Nikkei index fell 102.85 points, or 0.87%, to 11,739.12, hurt by losses in the U.S. overnight on worries of more aggressive interest hikes going forward. Fuji TV Network plunged 7%, as investors cast doubt over a potential take-over plan by internet Services firm Livedoor.
In Hong Kong, the Hang Seng index lost 172.86 points, or 1.25%, to close at 13,603.61 with top index percentage laggards Esprit (-4.6%), Wheelock (-4.2%) and CNOOC (-3.4%). According to press reports, Esprit Holdings' major shareholder and chairman Michael Ying may be looking to sell 80 million of his Esprit shares.