Stocks waver; signs on the economy hard to read

NEW YORK (AP) ? The stock market has the summer doldrums.

U.S. stocks dawdled between small gains and losses Thursday with investors unable to decide what to focus on: incremental encouraging news about the U.S. economy, or incremental negative news about China and elsewhere.

The Dow Jones industrial average was down less than a point by late afternoon. It has barely budged for most of the week, rising Monday through Wednesday but only by small fractions of a percent. The relative quiet is partly due to a lack of major developments in the European debt crisis or decisive news on the U.S. economy. Another reason is simply because traders like to clear out for vacation in August.

"I think there are more active managers in the Hamptons than there are in Manhattan," said Hugh Johnson, chairman and chief investment officer of Hugh Johnson Advisors in Albany, N.Y.

David Abuaf, chief investment officer of Hefty Wealth Partners, wasn't in the Hamptons ? he was in his office in Auburn, Indiana. But he agreed about the dearth of market-moving developments, and thinks the small gains so far this week have been driven by investment managers who are underwhelmed by the economy but feeling pressured to produce good returns.

"There has been nothing systemically consistent, either good news or bad news," Abuaf said. "So a lot of professional asset managers are saying, 'I don't know where I want to put my money, but if I don't invest now then my clients are going to start demanding their money back.'"

The Dow was trading at 13,176 shortly after 3 p.m., virtually flat compared to the day before. The Standard & Poor's 500 was up less than two points to 1,404. The Nasdaq edged up seven to 3,019.

Conflicting news about the world economy rendered the market trendless.

In the U.S., the government reported that the trade deficit fell to the lowest level in 18 months, which is generally considered good for the economy. In June, the U.S. enjoyed lower prices for the oil it brought in and higher sales of the cars, pharmaceuticals and industrial machinery it shipped out.

But the report also brought a troubling sign that China, which had strong growth even through the recession and afterward, can't prop up world markets forever. U.S. exports to China dropped more than 4 percent. Separately, China reported that growth slowed in auto sales and factory output.

Another emerging-market giant, India, reported lower industrial output for the third time in four months.

The U.S. also reported weekly jobless claims, but those results didn't provide much clarity either. The number of Americans applying for unemployment benefits fell slightly last week. However, the average for the past four weeks, generally a more reliable indicator, rose slightly.

Advance Auto Parts fell after reporting lower revenue and net income, losing 3 percent, or $2.05, to $68.52. Cosmetics company Elizabeth Arden jumped more than 12 percent, rising $4.76 to $43.72, after reporting strong international sales.

Hillshire Brands, maker of Ball Park hot dogs and Jimmy Dean sausage, rose 2 percent, gaining 48 cents to $25.65. The company said it is preparing to introduce new ads and new products that will support profits.

Online brokerage E-Trade jumped 7 percent, rising 56 cents to $8.58, after the company unexpectedly fired its CEO. The reasons for the dismissal weren't immediately clear, but the stock has languished and the company's largest shareholder, hedge fund Citadel, has clamored for change.

There were a handful of foreboding reminders that Europe's economy remains in trouble.

Germany's Commerzbank predicted lower profits for the rest of the year, worrying that customers are too nervous to invest or take out loans.

Greece reported that unemployment soared to 23 percent in May from 17 percent the year before. Among people under 25 years old, 55 percent are out of work.

All year the market has swung back and forth on even small developments out of Europe, which is grappling with how to solve its debt burden. But Thursday, investors apparently didn't mind.

"Investors are essentially giving (European) policymakers a pass over the next few weeks because it's summer," said Jeremy Zirin, chief equity strategist at UBS Wealth Management. "But when summer is over and everyone is back in September, markets are not going to be willing to give policymakers as much time and as much rope."

Source: http://news.yahoo.com/stocks-waver-signs-economy-hard-read-180830443--business.html

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