Little change for US stocks

Wall Street ended a lacklustre session little changed today after a speech by Federal Reserve Chairman Ben Bernanke failed to give investors any hints about US interest rate policy despite their concerns that the economy might be slowing too fast.

Further exasperating investors was a rally in oil and natural gas prices, which helped push blue chips lower and reinforced concerns that consumer spending will weaken.

Stocks, which closed mostly lower, have retreated this week on questions about whether the US economy is heading for a soft landing.

With little to guide them in slow summer trading, investors dwelled on this week’s sluggish housing and durable goods data. Traders had hoped Bernanke might sound a more dovish tone after another Fed official said interest rate hikes might still be in store this year.

“Without anything from Bernanke, the theme of the week is that there’s now a negative shift in opinion about the economy due to housing data,” said Arthur Hogan, chief market analyst at Jefferies & Co. “Don’t forget volume is light, there’s not that many buyers and sellers out there, and that will push the market in one direction without much effort.”

The Dow Jones industrial average fell 20.41, or 0.18%, to 11,284.05.

Broader stock indicators were narrowly mixed. The Standard & Poor’s 500 index slipped 0.97, or 0.08%, to close at 1,295.09, and the Nasdaq composite rose 3.18, or 0.15 percent, to end on 2,140.29.

Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.79% from late Thursday's 4.81%. The dollar was mixed against other major currencies, while gold prices rose.

For the week, the Dow ended down 0.86%, the Nasdaq fell 1.09%, and the S&P 500 dropped 0.55%.

Analysts said investors were waiting to see if stocks could latch on to a direction next week, when a batch of economic data including consumer confidence, job growth and manufacturing readings will be released.

“There’s still a coin toss to how people will respond, but we believe the focus on rates is going to diminish and people will look more at the economic data to see how severe the downturn is going to be,” said Warren West, head trader at Greentree Brokerage Services in Philadelphia. “We’re to stop celebrating a downturn, and start to worry it will be more than just a soft landing.”

Many investors believe recent data suggests the Fed might have gone too far by raising rates 17 times in a row in two years. If the US economy moderates too quickly, that could erode corporate profit and consumer spending.

Also adding to the stock market’s woes has been the direction of oil. Crude prices have crept higher on concern Iran, the world’s fourth-largest producer, will blockade exports if it’s sanctioned over its nuclear program.

But, the most immediate fear is a storm south of Puerto Rico that could threaten Gulf of Mexico production some time next week. A barrel of light sweet crude for October delivery rose 15 cents to $72.51 on the New York Mercantile Exchange.

Higher fuel prices pushed the Dow Jones transportation average, which measures US transport industry stocks, lower for the seventh week in a row. Continental Airlines shares fell 43 cents to 22.96, while American Airlines parent AMR dropped 46 cents, or 2.3%, to 19.40.

Technology stocks moved moderately higher, with XM Satellite Radio Holdings up 59 cents, or 4.6%, to 13.49. The company, whose shares were off nearly 54% from the start of the year, was given regulatory approval for three radio models with FM transmitters.

Sandisk, which makes removable memory products used in electronics like digital cameras, was one of the Nasdaq’s most heavily traded stocks after it was upgraded to a “Buy” rating from Caris & Co. Shares rose 1.60, or 3%, to 54.61.

Ford added 24 cents, or 3.1%, to 8 after former US Treasury Secretary Robert E Rubin resigned from the board, citing a potential conflict of interest with his duties as a member of the chairman’s office at Citigroup Inc.

There has been continued speculation the Ford family might take the company private, or pursue a sale or alliance with another vehicle manufacturer.

Declining issues beat advancers by nearly 5 to 2 on the New York Stock Exchange, where volume totalled 1.07 billion, compared to 1.26 million traded on Thursday.

The Russell 2000 index of smaller companies rose 0.52, or 0.07%, to 699.24.