NEW YORK — Stocks finished a choppy day of trading Wednesday mostly higher after positive reports on home sales and factory orders.
The Dow Jones industrials rose for the seventh straight day, marking another high for the year. All the major stock indicators finished in positive territory, but the gains were tiny.
An increasingly cautious mood has gripped the market in recent days, after a period of buying this spring and summer that sent stocks up more than 45 percent since early March. While economic data is improving, investors question whether the market can go much higher without evidence of economic growth.
"The general consensus seems as though the market is ripe for some sort of pullback at some point," said Andrew Frankel, co-president of Stuart Frankel & Co. "We seem to be floating up on air."
With trading volume and news flow tapering down amid Wall Street's annual summer slowdown, analysts say there are few near-term catalysts that could spur the market higher.
Stocks seesawed without a clear direction Wednesday despite a Commerce Department report that said new-home sales rose 9.6 percent in July, the fourth-straight monthly increase. Sales rose to 433,000, the strongest pace since September and well above the 390,000 figure economists expected.
The latest sign of improvement in housing didn't do much to impress investors, who have already factored in a recovery in the long-suffering home industry. Some of the latest gains can beattributed to a federal tax credit for first-time homeowners currently set to expire in November, and the industry has been pressing Congress to extend it.
A separate Commerce Department report showed that orders for goods expected to last at least three years rose 4.9 percent in July - the biggest jump in two years and more than the 3 percent increase economists had expected.
However the overall increase was driven by a surge in orders for transportation equipment, which benefited from the government's "cash for clunkers" program that drove thousands of people to trade in older cars for new ones. Excluding transportation goods, orders rose 0.8 percent, just short of analysts' expectations.
The Dow Jones industrials rose 4.23, or 0.04 percent, to9,543.52. The Standard & Poor's 500 index rose 0.12, or 0.01 percent, to 1,028.12, while the Nasdaq composite index rose 0.20, or 0.01 percent, to 2,024.43.
Declining stocks narrowly outnumbered advancers on the New York Stock Exchange, where volume was 5.1 billion shares, down from 5.7 billion shares at the close of trading on Tuesday.
In other trading, the Russell 2000 index of smaller companies rose 0.80, or 0.1 percent, to 584.02.
Government bond prices were little changed despite favorable demand at an auction of $39 billion in five-year notes. The yield on the benchmark 10-year Treasury note was unchanged from late Tuesday at 3.44 percent.
The dollar mostly rose against other major currencies, while prices for gold and other metals fell.
Business, Pages 24 on 08/27/2009