NEW YORK — Investors treaded water for a second day Wednesday as a batch of mixed economic reports and signs of division among Federal Reserve policymakers offered little new insight into the economy.
Stocks ended little- changed, but modest gains pushed the Standard & Poor’s 500 index to a 15-month high. The tone seen Tuesday and Wednesday reflected investors’ caution as they awaited the government’s monthly employment report Friday.
The day’s economic news wasn’t enough to galvanize traders still trying to determine which direction the market will take in the early part of 2010.
A sign of growth in the services industry gave some support to stocks. The Institute for Supply Management said its services index rose to 50.1 in December from 48.7 in November. A reading above 50 signals growth.
But the news about service companies was offset by a report that employers cut 84,000 private-sector jobs last month. The ADP National Employment Report came in worse than the forecasts of analysts polled by Thomson Reuters.
The latest batch of reports was similar to what investors have seen for months — figures that reveal modest improvements but remind them that the economy remains weak. The stock market has been rising for 10 months on signs that the economy is recovering, but analysts say stronger signs of growth will be needed to feed its advance in 2010.
Dave Rovelli, managing director of trading at brokerage Canaccord Adams in New York, said traders aren’t willing to place big bets ahead of the Labor Department’s report at the end of the week. Economists expect that the unemployment rate ticked up to 10.1 percent in December from 10 percent in November.
Weekly figures for initial claims for jobless benefits are due today.
“The unemployment number on Friday is the big deal,” he said. “And it’s light volume, so I wouldn’t be surprised if we just drift higher.”
The Dow Jones industrial average rose 1.66, or less than 0.1 percent, to 10,573.68. The broader S&P 500 index rose 0.62, or 0.1 percent, to 1,137.14, its highest close since Oct. 1, 2008. The Nasdaq composite index fell 7.62, or 0.3 percent, to 2,301.09.
John Dorfman, chairman of Thunderstorm Capital LLC in Boston, said the market is likely being weighed down by investors who waited to sell some of their winning stocks from last year until this week because the taxes will fall under 2010.
Beyond tax moves, however, he said many traders are going to be reluctant to wade back into stocks until the market shows more direction. Ultimately, he expects improvements in the economy will push stocks higher.
