Stocks mixed after varying economic data

Wednesday, May 07, 2008 - 03:08 PM

By MADLEN READ
AP Business Writer

NEW YORK

The stock market traded mixed Wednesday, as investors found little direction in the day´s economic data and watched oil prices climb further into record territory.

After the Energy Department said both crude and gasoline inventories in the United States increased last week, crude prices reached a new high of $122.81 a barrel on the New York Mercentile Exchange.

Inflation has been a burgeoning concern lately. Oil prices have doubled over the past year, causing gasoline prices to surge further into record terrain and strap debt-laden U.S. consumers with yet another financial burden. Kansas City Federal Reserve President Thomas Hoenig in a speech late Tuesday cited inflation as his main worry.

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

But the economic picture is still mixed _ the National Association of Realtors said pending sales of existing homes fell in March by 1 percent, more than many economists predicted. Weak housing data hardly comes as a surprise to investors, but bolsters the argument that even if the economy turns around later in the year, the housing market will take a long time to recover.

The Dow Jones industrial average fell 30.04, or 0.23 percent, to 12,990.79.

Broader stock indicators were mixed. The Standard & Poor´s 500 index fell 4.19, or 0.30 percent, to 1,414.07, and the Nasdaq composite index rose 4.33, or 0.17 percent, to 2,487.64.

The stock market logged a modest advance Tuesday despite surging 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 lower. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.93 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.

Clearwire rose $1.38, or 8.4 percent, to $17.84, and Sprint rose 40 cents, or 4.4 percent, to $9.59.

Overseas, Japan´s stock market rose 0.38 percent. By afternoon trading in Europe, Britain´s FTSE index rose 0.71 percent, Germany´s DAX index rose 0.98 percent, and France´s CAC-40 rose 0.87 percent.

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