The Dow Jones industrial average finished down 6.66 points, 0.07%, to 9,333.79. The broader Standard & Poor's 500 index finished up 0.06 point, at 996.79. The Nasdaq added 11.49 points, or 0.65%, to 1,782.14.
On Wednesday, trading was thin, with gold stocks surging, says S&P MarketScope, as December gold futures soared almost $7 an ounce.
With summer's end approaching, investors are bracing for the month of September, historically a month of decline for stocks. Meantime, the balance between stocks and bonds is another matter of debate.
"With rates having rapidly bounced back to 4.5% and bonds now more fairly valued, we now modify our former recommendation to underweight bonds by 5% and favor cash and instead recommend investors add 5% exposure to bonds," says Jeffrey Kleintop, chief investment strategist at PNC Advisors.
Thursday will bring a pile of data. Economic research outfit MMS International expects initial jobless claims to rise 4,000 to the 390,000 level in the week ended Aug. 23. Claims have been below the 400,000 level in four out of the past five survey weeks
MMS sees a 2.6% gain in unannualized after-tax corporate profits in the second quarter, following gains of roughly 4% in each of the prior two quarters, and 2% in the first three quarters of 2002.
The latest update on gross domestic product should show a 3% gain from the 2.4% increase previously reported, due to sizable upward revisions in consumption spending and net exports during the quarter, says MMS. The revised data should provide significant support to forecasts of 5% GDP growth in the third and fourth quarter.
In company news Wednesday, H&R Block (HRB
) said it showed a profit in the most recent quarter, vs. a loss in the same period last year. Low interest rates kept its mortgage operations strong.
Retailers reported positive outlooks. Department store chain Sears (S
) said Tuesday that August sales at stores open at least a year would be higher than expected.
Deep discount retailer Dollar Tree Stores (DLTR
) raised its sales and earnings guidance after the market close Tuesday.
In tech news, Semtech (SMTC
), maker of analog and mixed-signal
semiconductors, reported a fall in quarterly sales and income after a debt-related charge.
After Wednesday's close, investors will view earnings updates from retailers Chico's FAS (CHS
) and Michaels Stores (MIK
), as well as chipmaker LTX Corp. (LTXX
Treasuries finished lower in price Wednesday. The market focused primarily on cheapening up the 2-year note ahead of the $25 billion auction. Even after that effort, the results were pretty tepid and the market remained soft. Thin conditions hampered the sale, says MMS. Also restraining trading volumes were the looming Wyoming speech by Greenspan on Friday, month-end and the long weekend.
MMS also notes that "upside risks to the 2003 economy since the Fed shifted the market's focus toward deflation and alternative easing strategies" have risen considerably. This creates "huge upside risk to real GDP growth beyond our current 5% estimates for the third and fourth quarter."
The International Monetary Fund's World Economic Outlook will reportedly include criticism of the U.S. for being too optimistic on plans for state spending and revenues and lacking a budget consolidation plan.
European bourses finished up on strength in tech issues. London's Financial Times-Stock Exchange 100 index finished up 29.00 points, or 0.69%, at 4,206.40, amid strength in bank stocks. In Paris, the CAC 40 ended higher by 23.33 points, or 0.72% at 3,280.02. Germany's DAX index rose 27.60 points, or 0.80%, at 3,483.08.
Asian markets stumbled on profit-taking toward the end of the session, but strength in finanical stocks and retailers helped limit losses in Japan. The Nikkei 225 index lost 23.58 points, or 0.23%, to finish at 10,308.99. In Hong Kong, the Hang Seng index fell 75.38 points, or 0.70%, to close at 10,678.55.