Stocks zigzag after weak reading on manufacturing
NEW YORK — Stocks are trading in a tight range as investors worry about trouble spots in the economy.
Stocks are zigzagging Thursday following a Philadelphia Federal Reserve report that regional manufacturing conditions weakened more than expected.
Investors are also cautious after small business lender CIT Group Inc. said negotiations with regulators about a rescue broke off. That is hurting financial stocks as traders worry that CIT could file for bankruptcy.
Stocks have surged this week on upbeat earnings reports and forecasts so the market’s pause isn’t surprising.
At midday, the Dow Jones industrial average is down 2 to 8,614. The Standard & Poor’s 500 index is down 3 to 930, and the Nasdaq composite index is up 1 to 1,864.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
NEW YORK (AP) — Investors worried about trouble spots in the economy kept stocks trading in a tight range.
Stocks were narrowly mixed Thursday after the Philadelphia Federal Reserve said regional manufacturing conditions have weakened more than analysts had expected.
The stock market had surged earlier this week on upbeat earnings reports and forecasts, restarting a rally that stalled last month. But after three days of gains, caution has returned as small business lender CIT Group Inc. said negotiations with regulators about a rescue broke off. That hurt financial stocks as traders worried that CIT could file for bankruptcy.
Better news on earnings and the labor market wasn’t enough to lift stocks. The Labor Department said new claims for unemployment insurance plunged last week by 47,000 to 522,000, the lowest level since early January. Economists polled by Thomson Reuters predicted an increase to 575,000.
The improved data, however, may have been affected by the timing of automobile plant shutdowns. Eric Thorne, an investment adviser at Bryn Mawr Trust Co. said the figures were “skewed.”
JPMorgan said Thursday it generated record revenue, spurred on by strong investment banking operations. Its results come two days after Goldman Sachs Group Inc. also topped expectations with much stronger results in underwriting and trading.
In late morning trading, the Dow Jones industrial average rose 10.28, or 0.1 percent, to 8,626.49. The Standard & Poor’s 500 index fell 0.94, or 0.1 percent, to 931.74, while the tech-heavy Nasdaq composite index rose 2.99, or 0.2 percent, to 1,865.89.
Meanwhile, bond prices jumped. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.53 percent from 3.62 percent late Wednesday.
Strong earnings from the banks have encouraged investors about the economy. The results also show that many of the nation’s biggest banks have quickly recovered from the collapse of credit markets last fall that led to the failure of Lehman Brothers and near collapse of American International Group Inc.
Thursday brings more earnings reports that could provide additional signs into how the economy is faring. Internet powerhouse Google Inc. and computer maker International Business Machines Corp. both report earnings after the market closes.
In other trading, the dollar fell against other currencies. Gold prices fell.
Light, sweet crude fell 59 cents to $60.95 a barrel on the New York Mercantile Exchange.
Declining stocks narrowly outnumbered advancers on the New York Stock Exchange, where volume came to 304.9 million shares, compared with 340.5 million shares traded at the same point Wednesday.
The Russell 2000 index of smaller companies fell 1.08, or 0.2 percent, to 514.56.
Overseas, Japan’s Nikkei stock average rose 0.8 percent. In afternoon trading, Britain’s FTSE 100 rose 0.6 percent, Germany’s DAX index rose 0.9 percent, and France’s CAC-40 gained 1.3 percent.
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