US stocks end mixed

US stocks began the week indecisively today, closing mixed in the absence of earnings news to guide investors. But the major indexes managed to rebound from sizeable early losses.

Analysts attributed the wavering to technical factors, not fundamentals. While the stock market was due for a correction, analysts said investors were willing to sell stocks lower only to a certain point – about 9,050 on the Dow Jones industrial average and 1,690 on the Nasdaq composite index – based on their belief the US economy is poised for good recovery in the second-half of 2003.

Once those gauges fell below those points, investors began buying again.

“It is all technical. ... There is no news to account for it,” said Peter Cardillo, president and chief strategist of Global Partner Securities Inc, of Wall Street’s late-day turnaround.

Analysts said the gains had little if anything to do with a bigger-than-expected rise in orders to US factories, because stocks had ignored the report earlier.

After falling as much as 105.39, the Dow closed up 32.07, or 0.4%, at 9,186.04.

The broader market was mixed, but also rebounded from steeper losses. The Nasdaq slipped 1.56, or 0.1%, to 1,714.06, having dropped as much as 27.85. The Standard & Poor’s 500 index advanced 2.67, or 0.3%, to 982.82, having shed as much as 13.36.

Analysts anticipate August will be difficult for the market as investors put off big moves ahead of the Autumn’s onslaught of economic data and traders take summer holidays.

With stocks well above their March 11 lows, analysts say investors have already priced into the market a second-half economic recovery and so are likely to take some profits in the near term. At the end of today’s trading, the Dow was up 21.7% from March 11, while the Nasdaq was up 34.9% and the S&P was up 22.4%.

“August certainly bodes well for some sort of technical correction. Fundamentally, the market is strong. Once we get this healthy technical correction out of the way, you will see the market act quite nicely,” Cardillo said.

But in a sign of Wall Street’s growing optimism, market observers actually viewed some pullback as a positive thing.

“Taking a break is giving people time to look at the numbers and see if we are seeing improvements. And, we are seeing good improvements,” said Chris Johnson, manager of quantitative analysis at Schaeffer’s Investment Research in Cincinnati.

Indeed, today’s economic news was upbeat. The Commerce Department reported US factory orders rose by 1.7% in June, the biggest gain in three months and stronger than the 1.5% gain economists predicted.

US Steel rose 73 cents to 16.31 after posting a quarterly loss of a penny a share, smaller than the 6 cent shortfall analysts anticipated. The company also said that revenues jumped to 2.4 billion, compared with 1.8 billion for the second quarter of 2002.

Monsanto declined 47 cents to 21.68 after Banc of America Securities downgraded the agriculture company to ”neutral” from “buy”,

Declining issues outnumbered advancers 9 to 5 on the New York Stock Exchange. Trading volume was light.

The Russell 2000 index, which tracks smaller company stocks, fell 3.32, or 0.7%, to 464.76.