New York – Wall Street retreated modestly in wobbly trading Thursday, with investors putting their buying spree on hold to mull over mixed economic data. The Dow Jones industrial average briefly surpassed 13,500 for the first time, then pulled back.
Investors refrained from making any big moves after data Thursday showed strength in some areas of the economy, particularly employment, but weakness in others – giving little indication about whether the Federal Reserve will lean toward an interest-rate cut later in the year.
Robust economic data Thursday included the Labor Department’s report that jobless claims fell last week for the fifth straight week and the Philadelphia Fed’s May manufacturing index, which showed a stronger-than-anticipated increase. But the Conference Board forecast slower economic growth, with its April index of leading economic indicators declining more than expected.
Ultimately, it was a fairly directionless day on Wall Street, with investors uninspired by Thursday’s data and more eager to hear about today’s consumer-sentiment report from the University of Michigan, said John O’Donoghue, co-head of equities at Cowen & Co.
“The market’s kind of on this monotonous grind higher, and you’ll have days where you have a pause in the marketplace,” O’Donoghue said. “But it doesn’t seem like we’re going to have a correction any time soon.”
New takeover activity, which has helped bring the Dow up more than 1,200 points over the past two months, failed to fuel a rally Thursday. Alliance Data Systems Corp. agreed Thursday to a $6.43 billion takeover by Blackstone Group, right after Acxiom Corp. said late Wednesday it was being bought by two private-equity firms for $2.24 billion.
The Dow fell 10.81, or 0.08 percent, to 13,476.72, after rising as high as 13,516.71. On Wednesday, the index reached its 23rd record close of the year.
Broader indexes also declined. The Standard & Poor’s 500 index lost 1.39, or 0.09 percent, to 1,512.75, and the Nasdaq composite index fell 8.04, or 0.32 percent, to 2,539.38.
Many market watchers say stocks may eventually see a big dip but that the long-term trend for the market is positive.
“It’s not one of those you- can’t-lose situations, but the odds are stacked in your favor if you’re a disciplined investor. There’s more room for catch- up,” said Philip Dow, managing director of equity strategy at RBC Dain Rauscher in Minneapolis.
