Stocks seesawed Wednesday as a mixed reading on the housing sector appeared to unnerve investors.
Commerce Department data that showed housing starts fell to their lowest level in 17 years during April punctured an early rally, though stocks later regained some of their lost ground. The market drew some support from a Federal Reserve report that showed industrial output rose by more than expected last month.
The housing start news came a day after a lackluster read on the housing sector upended a big rally in stocks that sent the Dow Jones industrials briefly above 13,400 for the first time. In midday trading, the Dow rose 25.84, or 0.19 percent, to 13,409.68 after falling earlier.
Broader stock indicators also rose. The Standard & Poor's 500 index advanced 3.75, or 0.25 percent, to 1,504.94 and the Nasdaq composite index fell 1.56, or 0.06 percent, to 2,526.85.
Bonds showed little change despite the economic readings. The yield on the benchmark 10-year Treasury note remained flat at 4.71 percent from late Tuesday. The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude fell 91 cents to $62.26 per barrel on the New York Mercantile Exchange. Crude prices have risen in recent sessions amid concerns about supply disruptions, particularly in Nigeria where production has been buffeted by protests. Weekly U.S. inventory data showed domestic gasoline and crude inventories rose more than expected last week.
Wall Street continues to have an appetite for a steady stream of economic data as it tries to determine where the economy is headed. Good or bad economic news in recent months has often dictated the direction of stocks as investors struggled to determine whether a recent rally will continue or whether the market is due for a pullback.
On Wednesday, investors appeared pleased by word that construction of homes and apartments increased 2.5 percent in April from March to a seasonally adjusted annual rate of 1.528 million units. In a potentially worrisome sign, however, requests for new construction permits -- or housing starts -- fell 8.9 percent in April, the biggest drop since a 24 percent plunge in February 1990.
Investors embraced the Fed's report that industrial output rose by 0.7 percent in April. The gain was more than double the 0.3 percent gain that had been expected and in part reflected a rebound in manufacturing and an increase in output from utilities. In March, output fell 0.3 percent.
In corporate news, Federated Department Stores Inc. said it swung to a profit from a loss, although earnings excluding costs of the company's integration of May Department Stores Co., which it acquired in 2005, fell short of Wall Street's expectations. Federated fell 29 cents to $39.65.
Citigroup Inc., one of the 30 stocks in the Dow industrials, rose $1.92, or 3.6 percent, to $54.71 after billionaire hedge fund manager Edward S. Lampert said he acquired more than 15 million shares of the financial services conglomerate.
Johnson & Johnson, also a Dow component, rose after Warren Buffett's Berkshire Hathaway Inc. reported in a regulatory filing that it doubled its stake in the company.
Dell Inc. rose 77 cents, or 3.1 percent, to $25.44 as investors appeared relieved that a lawsuit filed by New York Attorney General Andrew Cuomo accusing the computer maker of deceiving consumers isn't tied to a Securities and Exchange Commission inquiry into Dell's accounting practices.
The Russell 2000 index of smaller companies fell 1.37, or 0.17 percent, to 812.81.
Declining issues barely outnumbered advancers on the New York Stock Exchange, where volume came to 634.1 million shares.
The dollar was mixed against other major currencies, while gold prices fell. Overseas, Japan's Nikkei stock average closed up 0.09 percent. Britain's FTSE 100 fell 0.14 percent, Germany's DAX index fell 0.32 percent, and France's CAC-40 fell 0.53 percent.
Source: AP
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