US stocks finish choppy session with modest gains

Wall Street ended a mostly indecisive session with modest gains today as investors, still uneasy about stocks’ high prices, hesitated to extend the previous session’s huge rally.

But analysts said investors, despite their nervousness, were concerned about missing out on the next bull market and so were more inclined to buy stocks than sell.

“It seems to be somewhat tentative,” said Peter Cardillo, president and chief strategist of Global Partner Securities Inc, of today’s trading. “But nevertheless, I kind of think what we are seeing is people trying to get in the market who held out in the month of September. ... Investors want to be long in the market.”

The Dow Jones industrial average closed up 18.60, or 0.2%, at 9,487.80. On Wednesday, the Dow surged 194.14 – achieving its biggest daily win since June.

The broader market also finished higher. The Nasdaq composite index rose 3.97, or 0.2%, to 1,836.22, following Wednesday’s gain of 45.31, its biggest one-day win in three months.

The Standard & Poor’s 500 index advanced 2.02, or 0.2%, to 1,020.24, having climbed 22.25 in the previous session, its biggest daily gain in six months.

Today’s economic news was disappointing, which also put pressure on Wall Street and made it hard for stocks to advance.

Orders to US factories dropped by 0.8% in August, the first decline in four months, the Commerce Department said. Economists expected a smaller decline of 0.5%. The weakness was broad-based with orders falling for both big-ticket items, such as cars, and “non-durable” goods, such as clothes.

The Labour Department reported new claims for jobless benefits rose last week as laid-off workers who had been delayed filing because of Hurricane Isabel finally made it into state offices to do so.

New applications for unemployment benefits rose by a seasonally adjusted 13,000 to 399,000 for the work week ending September 27, the highest level in two weeks.

Ashland Inc advanced 1.54 to 35.42 after Bear Stearns raised its rating on the oil services and diversified chemicals company to “peer perform” from ”underperform”.

Chipmaker Advanced Micro Devices rose 52 cents to 11.69 after JP Morgan upgraded it to “neutral” from ”underweight”.

On the downside, software maker Intuit Inc. fell 1.60 to 47.62 after reaffirming its August forecast calling for a loss of 29 cents to 33 cents a share in the fiscal first quarter ending October 31.

Staples Inc. fell 58 cents to 23.82 and Office Depot Inc. declined 24 cents to 14.34 after Banc of America Securities lowered its ratings on the office supply retailers to “neutral” from “buy”.

Advancing issues outnumbered decliners about 8 to 5 on the New York Stock Exchange. Trading volume was moderate.

The Russell 2000 index, the barometer of smaller company stocks, rose 2.88, or 0.6%, to 503.20.