Blue-chip stocks were held to a minuscule gain today as broader indicators retreated. A surge in interest rates after a disappointing Treasury bond auction deflated a bid to extend Wednesday's rally.
The Dow Jones industrial average rose 1.59, to 10,789.39. The Dow rose as much as 113 points at one point as it followed through on Wednesday's 132.65-point gain.
Broader indicators gave up early gains to finish lower. The Standard & Poor's 500 fell 3.77, to 1298.16, and the Nasdaq composite index fell 15.49, to 2549.49.
Stocks were higher across the board for much of the session as bargain-hunters sought out shares that have been pounded down from the record heights reached in mid-July.
But worries about higher interest rates, which have held the market down for the past three weeks, prevailed today.
Stocks fell after the Treasury's afternoon auction of $10 billion in 30-year bonds. Traders said demand for the bonds fell short of expectations, driving the price down and the yield up. The yield on 30-year bonds rose from 6.21 percent Wednesday to 6.27 percent today in the open market--a level unseen since Oct. 28, 1997--as the price rose $7.19 per $1,000 in face value.
While economists remained focused on the stream of economic data, companies across a wide range of sectors served up market-moving news.
United Technologies posted the sharpest gains of all Dow components, rising 3-3/16, to 66 3/8, after saying it will cut 1,500 jobs in an effort to reduce costs at its Pratt & Whitney jet-engine unit.
Caterpillar, up 1 3/4 at 61, also helped buoy the Dow after Goldman Sachs added the company to its list of recommended stocks.
America Online edged up 3/8, to 92 3/4, extending its gains from the previous session. AOL shares rose 7 3/8 on Wednesday after company executives held an upbeat conference call with analysts and major investors.
But most major computer makers slipped today after a Merrill Lynch analyst said in a report that a trend toward low-priced computers could eventually cut into profits. Hewlett Packard lost 6-5/16, to 103-1/16, the biggest decliner in the Dow.
Renewed rumors that Merrill Lynch will seek a merger partner in the financial services industry pushed its shares up 4 3/8, to 71 3/8.