Published: March 11, 2010
NEW YORK – Stocks traded in a tight range for a fourth day Thursday after China reported a sharp jump in inflation. Mixed U.S. economic news also held the market back.
China said its inflation rate jumped to 2.7 percent in February from 1.5 percent in January. Rapid inflation could force China to raise interest rates. That, in turn, could slow one of the world's fastest-growing economies and put a damper on a global recovery.
Meanwhile, the Labor Department said workers filing for jobless benefits for the first time fell by 6,000 to 462,000 last week. Economists were predicting a slightly bigger drop, forecasting new claims would fall to 460,000, according to Thomson Reuters.
The market was unimpressed. While the report showed some easing in the labor market, it didn't point to the increase in hiring that investors want to see. Stocks have traded in a narrow range since the Labor Department said on Friday that employers cut fewer jobs in February than analysts expected. The market is looking for more signs of progress.
The Commerce Department said the country's trade deficit fell in January because of a big drop in imported oil and cars. U.S. exports dipped 0.3 percent. The drop in U.S. exports might give investors pause because a drop in overseas sales could slow the recovery.
In late morning trading, the Dow Jones industrial average fell 3.63, or less than 0.1 percent, to 10,563.70. The Standard & Poor's 500 index dropped 1.06, or 0.1 percent, to 1,144.55, while the Nasdaq composite index rose 0.52, or less than 0.1 percent, to 2,359.47.
Bond prices dipped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.74 percent from 3.73 percent late Wednesday.
The dollar was mixed against other major currencies, while gold prices fell.
Crude oil rose 2 cents to $82.11 per barrel on the New York Mercantile Exchange.
Corporate dealmaking continued. Oil company BP will pay $7 billion to acquire exploration rights from Devon Energy Corp. BP will acquire rights to explore in Brazil, the U.S. Gulf of Mexico and Caspian Sea.
Increased mergers and acquisitions in recent weeks has been a welcome sign that corporate leaders believe the economy is getting stronger.
Major indexes slipped Monday and inched higher Tuesday and Wednesday. Volume has been light. The Dow and S&P 500 index have been hovering near 15-month highs, but investors haven't been in a rush to send those indexes much higher.
About two stocks fell for every one that rose on the New York Stock Exchange, where trading volume came to 216.8 million shares.
The Russell 2000 index of smaller companies fell 2.19, or 0.3 percent, to 672.74.
In afternoon trading, Britain's FTSE 100 fell 0.7 percent, Germany's DAX index fell 0.2 percent, and France's CAC-40 fell 0.6 percent. Earlier, Japan's Nikkei stock average rose 1 percent.
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