Mixed day for US stocks

Stocks closed mixed in New York today as a lower reading on manufacturing activity and rising oil prices chilled an early spate of bargain hunting.

But technology shares still eked out a modest advance.

The first rise in oil prices after seven sessions of declines added an element of gloom to a market already made sluggish by lacklustre trading.

Government data showed a steep drop in US oil inventories last week as imports fell and refiners continued to operate at unusually high rates, sending light crude for October delivery soaring 1.78 to 43.90 on the New York Mercantile Exchange.

Underscoring how exaggerated market moves can be when volume is light, the major indexes sank at midday on reports of a possible terror attack in Washington DC.

The market stabilised after it became clear the incident stemmed from the accidental release of pepper spray in a restaurant near the World Bank and International Monetary Fund, which are under heightened alert. Despite that, Wall Street never fully regained its momentum.

The Dow Jones industrial average closed down 5.46, or 0.05%, at 10,168.46.

Broader stock indicators were narrowly higher. The Standard & Poor’s 500 index rose 1.67, or 0.2%, to 1,105.91.

The tech-focused Nasdaq composite index gained 12.31, or 0.7%, to finish at 1,850.41.

With trading light, as it has been all week due to the Republican National Convention and the forthcoming Labour Day holiday, the markets were slow to react to the Institute for Supply Management’s manufacturing index for August.

Manufacturing activity rose for the 15th consecutive month, suggesting healthy activity in the sector, but the reading of 59 was three points lower than the one recorded for July, and fell short of economists’ expectations.

Many market participants are looking ahead to Friday, when the Labour Department is to publish its data for August.

Sagging monthly sales figures from the US’s two largest vehicle manufacturers offered little encouragement. General Motors lost 10 cents to 41.21 and Ford declined 21 cents to 13.90 after the companies said production cuts could dent fourth-quarter profits.

Intel’s midquarter report was expected to highlight what is ahead for the tech sector.

While there has been some concern that a negative outlook from the chipmaker would weigh heavily on tech shares, a round of analyst downgrades and lowered forecasts spurred speculative buying, leading analysts to surmise that investors may have already factored in a mediocre forecast. Intel ended the day up 14 cents at 21.43.

Among other chip stocks, Fairchild Semiconductor International added 3.6%, or 45 cents, to 12.78, after reiterating its third-quarter outlook from July.

And chip equipment maker Teradyne gained 3%, or 38 cents, to 13.25, although WR Hambrech cut its third-quarter earnings target.

Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange.

The Russell 2000 index of smaller companies was up 2.77, or 0.5%, at 550.70.