New York – Wall Street ended an erratic session essentially flat Monday as investors grew anxious about upcoming first- quarter earnings and the possibility that interest rates won’t be declining any time soon. A $2.77 drop in oil prices lent support to the major indexes.
With the market closed for Good Friday, traders had their first opportunity to react to Labor Department data that showed stronger-than-expected job growth in March. The numbers indicated the economy might be in better shape than previously thought and helped offset concerns about a continued slowdown in the housing market.
Takeover activity also provided some lift to the markets, with reports that Dow Chemical Co. has been targeted by Middle Eastern investors and U.S. buyout firms in a deal that could be worth $50 billion.
But upbeat news about the U.S. economy and corporate activity was interpreted by some on Wall Street as reasons for the Federal Reserve to hold off on cutting rates. And with earnings season to begin when Alcoa Inc. posts results today – and profit- growth levels expected to fall from previous quarters – investors had reason to be cautious.
Oil prices continued their steep decline, with a barrel of light, sweet crude settling down $2.77 to $61.51 per barrel on the New York Mercantile Exchange.
“All things point to the Fed, and now it looks like they are going to put rates on the back burner for a while after Friday’s numbers,” said Jay Suskind, head trader at Ryan Beck & Co. “And now the markets are looking toward earnings reports, where expectations have already been tempered.”
The Dow Jones industrials rose 8.94, or 0.07 percent, to 12,569.14.
Broader stock indicators were mixed. The Standard & Poor’s 500 index edged up 0.85, or 0.06 percent, to 1,444.61, and the Nasdaq composite index fell 2.16, or 0.09 percent, to 2,469.18.
The Russell 2000 index of smaller companies fell 1.71, or 0.21 percent, to 811.64.
Monday’s modest moves left last week’s advance intact; the major indexes rose each day last week and returned to positive territory for the year. Most major European markets were closed Friday and Monday for an extended Easter holiday.
The Labor Department report showed nonfarm payrolls rose by 180,000 in March, above forecasts of 135,000. The unemployment rate fell to 4.4 percent, a five-month low. Should the economy be stronger than some analysts estimated, it could dissuade the central bankers from lowering interest rates in the near term.
