Stocks were mixed today as a report of continued growth in the manufacturing sector ignited fears of inflation and hurt blue-chip firms. Technology stocks, benefiting from a wave of new deals and products, moved higher.
The Dow Jones industrial average fell 84.85 to close at 10,829.28. The Dow suffered its fourth straight loss during a volatile session in which the average rose as much as 67 points and tumbled as much as 132 from Monday's close.
Broader stock indicators were mixed. The technology-dominated Nasdaq composite index rose 26.66, to 2739.35, and the Standard & Poor's 500 fell 3.61, to 1320.41.
Stocks fell after the National Association of Purchasing Management inadvertently released its monthly survey on August manufacturing activity a day early.
The report showed that the NAPM's monthly index of business activity rose to 54.2 percent, from 53.4 percent in July. A reading above 50 is a sign of growth in the industrial sector of the U.S. economy.
Most troubling to stocks was a segment of the report that tracks prices paid by industry for raw materials and supplies. That figure rose to the highest levels since June 1995, suggesting that inflation may be building as the economy continues to grow.
Many cyclical stocks, whose performance is tied to the fortunes of the broader economy, fell. Sears fell 2, to 37 1/2, and Caterpillar fell 2 7/8, to 56 5/8.
Separately today, the Conference Board said its index of consumer confidence fell in August for the second straight month. The index, which measures consumers' likeliness to spend, edged down 0.4 of a point but still remains near the 30-year high reached in June.
Analysts expect the Labor Department's employment report, due on Friday, to provide the next spark in trading. Any suggestions that the U.S. economy is growing too quickly--a trend that would be shown by the number of new jobs created--could convince investors that the Federal Reserve will raise interest rates for a third time this year.
"This is a market searching for leadership," said Ned Riley, chief investment officer at BankBoston.
Higher rates threaten stocks by cutting into corporate profits and increasing the value of alternative investments, such as bonds.
Most oil companies were higher, including Dow components Chevron, up 1 at 92-5/16, and Exxon, up 1-9/16 at 78 7/8. Crude oil futures rose Monday after Venezuela, Mexico and Saudi Arabia decided against raising production.
Technology stocks bucked the market's weakness as several companies announced new deals or new products. Hewlett Packard rose 2-/16, to 105 3/8, after the company unveiled several new printers and paper.
On the Nasdaq, Sun Microsystems rose 3 3/4, to 79 3/8, after the company bought Star Division Corp., a small maker of office productivity software. Analysts viewed the acquisition as an assault on Microsoft's dominance of the office software market.
Apple rose 3-3/16, to 65 1/4, after the company unveiled a new high-speed desktop computer.