Stocks mixed ahead of pending home sales data

Wednesday, May 07, 2008 - 01:56 PM

By MADLEN READ
AP Business Writer

NEW YORK

The stock market traded mixed early Wednesday, with investors anticipating data on pending home sales and waiting to see if oil prices will climb further into uncharted territory.

At 10 a.m. EDT, the National Association of Realtors is expected to report that pending sales of existing homes declined in March, according to economists surveyed by Thomson Financial/IFR.

Wall Street got a dose of good news when the Labor Department said earlier Wednesday that labor costs rose at an annual rate of 2.2 percent. That´s down from a 2.8 percent rise the previous quarter, suggesting that inflation pressures may be letting up.

But inflation remains a concern given that oil prices have doubled over the past year to record levels above $122 a barrel on Tuesday. As a result, gasoline prices are surging further into record terrain, strapping debt-laden U.S. consumers with another financial burden. Kansas City Federal Reserve President Thomas Hoenig in a speech late Tuesday cited inflation as his main worry.

In addition to the home sales data, the stock market will be closely watching the energy market´s reaction Wednesday to the government´s weekly report at 10:30 a.m. EDT on U.S. fuel inventories. On the New York Mercantile Exchange, crude edged down 19 cents to $121.65 a barrel after reaching a record $122.73 overnight.

The Dow Jones industrial average slipped 15.88, or 0.12 percent, to 13,004.95.

Broader stock indicators were mixed. The Standard & Poor´s 500 index fell 1.95, or 0.14 percent, to 1,416.31, and the Nasdaq composite index rose 0.28, or 0.01 percent, to 2,483.59.

The stock market rose moderately Tuesday despite the surge in oil prices, as bargain hunters bought up pummeled financial and housing-related stocks in the hopes of a late-2008 economic rebound.

In morning trading Wednesday, gold prices fell, while the dollar rebounded against other major global currencies.

Bond prices edged higher. The yield on the benchmark 10-year Treasury note, which moves opposite its price, slipped to 3.91 percent from 3.92 percent late Tuesday.

In corporate news, Clearwire and Sprint Nextel Corp. are planning to merge their wireless broadband units to create a new $14.55 billion wireless communications company. The new company is getting a $3.2 billion investment from Intel Corp., Google Inc., Comcast Corp., Time Warner Cable Inc. and Bright House Networks.

Overseas, Japan´s stock market rose 0.38 percent. By afternoon trading in Europe, Britain´s FTSE index rose 0.69 percent, Germany´s DAX index rose 0.98 percent, and France´s CAC-40 rose 0.99 percent.

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