New York – Stocks finished a wobbly session flat Monday as stubbornly high bond yields discouraged investors from extending Wall Street’s recovery from last week’s steep losses.
The yield on the Treasury’s 10-year note rose to 5.15 percent Monday from 5.11 percent late Friday.
Last week, investors took signs of recalcitrant inflation to mean a rate cut by the Federal Reserve was unlikely, and they sent stock and bond prices tumbling; since yields move in the opposite direction from bond prices, market interest rates soared. The 10-year Treasury yield climbed above 5 percent for the first time since last summer.
The Fed has kept the federal funds rate, the interest banks charge one another for overnight loans, unchanged at 5.25 percent since last summer.
“I don’t think that there is a lot of clarity as to monetary policy for the rest of 2007, and I think that in general puts markets on edge,” said Les Satlow, portfolio manager at Cabot Money Management.
“I think it’s a reflection of institutional ambivalence,” he said of the back-and-forth direction of stocks.
The Dow Jones industrial average rose 0.57, or less than 0.01 percent, to end at 13,424.96, capping a day of trading that saw stocks slip, advance and then pull back again.
Broader stock indicators were narrowly mixed. The Standard & Poor’s 500 index rose 1.45, or 0.10 percent, to 1,509.12, and the Nasdaq composite index fell 1.39, or 0.05 percent, to 2,572.15.
Oil prices, which also stirred inflation concerns last week, rebounded Monday after falling sharply Friday. Iran’s oil minister said Monday the Organization of the Petroleum Exporting Countries doesn’t plan to release more oil into the market ahead of its next policy meeting in September. Light, sweet crude rose $1.21 to $65.97 per barrel on the New York Mercantile Exchange.
