Reports fail to inspire listless Dow

Wall Street stumbled through a listless session today, closing modestly lower as reports on industrial production and business inventories failed to satisfy investors who had bet on a quick economic rebound.

Stock struggled to advance on the reports, which showed gradual economic improvement.

“The news is mixed. It appears on balance things are getting better, but you’re not getting every indicator that things are positive,” said Robert Streed, portfolio manager of Northern Trust Select Equity Fund in Chicago.

“I think what investors need to hear from companies-- but probably won’t hear until they report earnings – is that companies are standing up and saying things are better,” he said. “You’ll need to hear good news for the market to continue higher from here.”

The Dow Jones industrial average closed down 22.74, or 0.2%, at 9,448.81, having declined 0.3% last week to end a five-week winning streak.

The broader market also finished lower. The Nasdaq composite index declined 9.33, or 0.5%, to 1,845.70. The Standard & Poor’s 500 index fell 3.82, or 0.4%, to 1,014.81.

The Federal Reserve reported that industrial production rose by 0.1% in August. That came after a revised 0.7% advance in July – but analysts expected a gain of 0.3%.

Meanwhile, the Commerce Department said business inventories edged lower by 0.1% in July, a reading that suggested companies were still wary of increasing supplies. The reading was in line with expectations.

Motorola Inc. dropped 14 cents to 10.70 after SoundView Technology Group lowered the cell phone maker’s stock rating to “neutral” from “outperform”, citing stiffer competition.

Insurance companies also fell as Hurricane Isabel approached the East Coast, stirring fears of huge property damage. American International Group Inc. dropped 1.20 to 58.85, while Chubb Corp. fell 60 cents to 64.25.

Gainers included home-improvement retailers Home Depot Inc., which rose 1.19 to 32.78, and Lowe’s Cos, which advanced 1.25 to 52.70, as consumers stocked up on supplies to prepare for the storm.

Declining issues outnumbered advancers 5 to 4 on the New York Stock Exchange. Volume was light.

The Russell 2000 index, which tracks smaller company stocks, fell 1.42, or 0.3%, to 507.64.