Stocks edge higher after mixed economic reports

AP News
Posted: Feb 28, 2012 2:39 PM
Stocks edge higher after mixed economic reports

The Dow Jones industrial average hovered near 13,000 Tuesday as uneven economic reports held the stock market's gains in check.

Consumer confidence jumped in February to the highest level in a year. Improved perceptions of the job market pushed the index sharply higher, but the number is still below the level that indicates a healthy economy.

The report, issued at 10 a.m., pushed the Dow Jones industrial average above 13,000, a marker it has broken through repeatedly in the past week during the trading day. The Dow still hasn't closed above that level since May 2008.

Technology stocks rose the most. Microsoft Corp. and Intel Corp. were among the biggest gainers of the 30 stocks that make up the Dow average.

The Dow's New Year's rally has faded since the index first cracked the 13,000 milestone last week. It has been trading sideways after gaining 6.5 percent in the first two months of the year. The Standard & Poor's 500 rose 9.1 percent in that time, the Nasdaq 14.6 percent.

Ryan Detrick, senior technical strategist with Schaeffer's Investment Research, said the index often loses momentum after hitting a big, round number, as short-term excitement about the market's rise gives way to more thoughtful analysis.

The Dow has dropped by an average of 0.4 percent in the two weeks after hitting a 1,000-point increment, according Detrick's research on the past 39 such events. The Dow typically gains 0.3 percent over a two-week span.

Detrick believes stocks will keep rising this year as growing economic optimism and market stability draw billions back into the stock market. He said retail investors and hedge funds have invested too little in stocks _ a threat to their performance if stocks rise faster than other investments.

"Two months ago, we were talking about a double-dip recession; now consumer confidence is growing," Detrick said. "A major milestone like 13,000 wakes up a lot of investors who have missed a lot of this rally."

The Dow Jones industrial average rose 13 points to 12,994 at 2:30 p.m. Eastern time. The Standard & Poor's 500 index rose one point to 1,369. The Nasdaq composite index rose 10 points to 2,976.

Earlier economic reports were weaker, pushing stock futures lower and leading to a mixed open.

Orders for long-lasting manufactured goods plunged 4 percent last month, the most in three years. Economists expected a drop of just 1 percent.

Much of the decline came from a pullback in business spending on machinery and equipment in January. Spending surged in that category late last year, before a key tax break expired. It fell last month by the most in a year.

The Standard & Poor's/Case-Schiller index of home prices fell in December for a fourth straight month in most major U.S. cities.

Among stocks making big moves:

_ Auto parts retailer AutoZone Inc. gained 2 percent after saying its profits increased 13 percent in the most recent quarter.

_ Oil and gas producer Southwestern Energy Co. fell 7 percent after the company said it will scale back production because of falling natural gas prices.

_ Domino's Pizza Inc. surged 14 percent after its fourth-quarter profit spiked 28 percent.


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