NEW YORK — Signs the U.S. economic recovery is advancing, albeit slowly, sent stocks bouncing up and down in narrow ranges for much of the day Wednesday.
NEW YORK — Signs the U.S. economic recovery is advancing, albeit slowly, sent stocks bouncing up and down in narrow ranges for much of the day Wednesday.
The Dow Jones industrial average closed with a loss of 7.36 points at 13,164.78. The broader Standard & Poor’s 500 index was up 1.60 points at 1,405.53 and the Nasdaq composite rose 13.95 points to 3,030.93.
U.S. industrial production increased last month as factories made more cars, computers and airplanes, according to the Federal Reserve.
It was a sign manufacturing is recovering after a weak spring. Also, consumer prices were unchanged in July from June, as a small drop in energy costs offset slightly higher food prices. The consumer price index hasn’t changed since March, which means inflation is in check.
Lower inflation gives the Federal Reserve more leeway to launch new programs intended to rekindle the economy. The Fed signaled at a meeting in late July that it is ready to act if growth and hiring stay weak.
Recent reports have suggested the economy improved somewhat in July. Employers created the most jobs in five months, while consumers spent a little more at stores after three months of declines.
Many investors wonder if the economy is fragile enough to create the sense of urgency for policymakers to act. The slightly better outlook for the economy could prompt the Fed to hold off on taking action when its policy committee next meets in September.
“We’re in a period of very slow growth, though interest rates are low, and very little inflation,” said David Kotok, chief investment officer at Cumberland Advisors. “Unless the U.S. economy goes into a swoon and there is no pickup in retail sales and deterioration in jobs growth or major shocks from Europe and China, the Fed will not take any action for now.”
The bond market is betting the Fed is not likely to act. Investors have been selling low-risk U.S. government bonds, sending the yield on the benchmark 10-year Treasury note up to 1.81 percent Wednesday. That’s up from 1.73 percent Tuesday and 1.66 percent late Monday.
As investors shuffled their money around, the Russell 2000 index of small stocks gained the most of the major indexes, 0.9 percent. The S&P was up 0.1 percent, the Nasdaq 0.5 percent.
In the last few weeks of the summer, trading volumes in the stock market have been low. On Wednesday, the number of shares changing hands on the New York Stock Exchange totaled just 2.6 billion, compared to an average of 4 billion on an average day. Investors may also be holding off on taking aggressive positions ahead of a meeting of the U.S. Federal Reserve in Wyoming at the end of this month.
U.S. earnings were mixed.
Target rose $1.12 to $64.50 after the retailer reported earnings that beat analysts’ expectations and raised its profit forecast for the year.
Deere plummeted $5.03 to $75.10 after the agriculture machinery maker reported results that were well below Wall Street’s expectations. The company attributed its poor results to a slowing global economy and the effects of a prolonged U.S. drought. Deere also cut its revenue forecast for the year.