Wall Street's Midday Gains Slip Away Amid Light Trading
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Friday, May 22, 2009; 4:24 PM
After a midday rally, Wall Street flattened out by the closing bell, with stocks dipping slightly into negative territory ahead of a long holiday weekend.
Following two days of losses, the Dow Jones industrial average, an index of 30 blue-chip stocks, the broader Standard & Poor's 500-stock index and the tech-heavy Nasdaq were all down about 0.2 percent -- 15 points, 1 point and 3 points, respectively.
Investors who have cheered signs the economy's deterioration might be slowing have become cautious in recent days. A grimmer economic forecast from the Federal Reserve weighed on stocks earlier this week as well as a move by Standard & Poor's to lower its outlook on Britain's debt yesterday.
Still, stocks have rebounded more than 30 percent since reaching a low point in March. Some investors have been locking in profits in expectation that the economy's recovery will be rocky, sending them on a wild ride.
Better-than-expected earnings reports from a few retailers helped parts of the market. Retailer Aeropostale's first-quarter profits jumped 81 percent, sending its stock up 3.6 percent. Sears stock was up 10.4 percent after the store reported a $26 million profit during its first quarter.
"In this challenging economic environment we are pleased with the progress we have made in improving our gross margin rate, controlling inventories and further reducing our cost structure," W. Bruce Johnson, Sears Holdings' interim chief executive officer, said in a statement.
General Motors, which government sources have said could soon file in bankruptcy, saw its stock tumble 25.5 percent today. It has had the biggest losses on the Dow.
Crude oil prices, which recently hit a six-week high, were up about 1 percent, to $61.67 a barrel on the New York Mercantile Exchange. That helped buoy some energy stocks, including Exxon Mobil, which was up 0.6 percent.
Overseas stocks were mixed. London's FTSE regained some ground after a sell-off yesterday spurred by concerns about Britain's high debt level. The Dax in Germany was also up slightly, but Japan's Nikkei was down slightly.
