US stocks rise slightly in erratic trading

Wall Street ended an erratic session with a modest advance today as investors awaited further signs about the health of the economy.

Falling oil prices and a contract win for Boeing Co offered some support to a lacklustre market, and the major indexes all ended with solid gains for the week.

Energy and materials stocks were weaker today, while utilities and financials fared better and generally moved higher.

The muted trading followed a sell-off yesterday after Democrats wrested control of Congress from the Republicans and touched off concern about sectors from health care to defence.

“Oil prices have fallen off a bit and that’s a positive, but there just doesn’t seem to be anything to give the markets a boost,” said Ed Peters, chief investment officer at PanAgora Asset Management Inc. “I think the market is just taking a rest here.”

According to preliminary calculations, the Dow Jones industrial average rose 5.13, or 0.04%, to 12,108.43.

Broader stock indicators showed modest advances. The Standard & Poor’s 500 index was up 2.57, or 0.19%, at 1,380.90, and the Nasdaq composite index was up 13.71, or 0.58%, at 2,389.72.

Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.59% from 4.63% late yesterday. The dollar was mixed against other major currencies, while gold prices fell.

For the week, the Dow rose 1.02%, while the S&P added 1.22% and the Nasdaq gained 2.53%, advances achieved largely on the market’s upbeat feeling about the election during the first half of the week. That sentiment gave way to uncertainty yesterday about whether the Democrats would be sympathetic to business issues.

Light, sweet crude was down 1.54 dollars at 59.62 dollars a barrel on the New York Mercantile Exchange after the International Energy Agency lowered its forecast for worldwide demand this year.

Mr Peters contends Wall Street will need economic news to really move the markets now that most companies have reported third-quarter earnings. He cited such news as minutes from the Federal Reserve’s most recent meeting, which are set for release next week.

“I think there is still a concern that interest rates will be rising, that the Fed will tighten further,” he said.

Investors want the economy to show adequate signs that it is slowing so the central bank will lower short-term interest rates.

Chris Hensen, portfolio manager for US equities at MFC Global Investment Management, contends that while the markets were largely flat today, stocks are not necessarily done moving higher.

Generally, the final months of the year are good for stocks as investors engage in a bit of window dressing to boost their portfolios.

Mr Hensen does not think the unusually strong October, when the major indexes all advanced at least 3%, will preclude a further climb through the end of the year.

He said investors are looking to earnings next week from several retailers as well as economic data such as the consumer price index, which is the key measure of inflation.

In corporate news today, Boeing won out over Lockheed Martin Corp and United Technologies Corp’s Sikorsky division in securing a contract worth as much as 13 billion dollars (-10.11 billion) to build combat search and rescue helicopters for the US Air Force. Boeing was up 51 cents at 85.62 dollars, while Lockheed was up 38 cents at 85.75 dollars and United Technologies was up 15 cents at 65.06 dollars.

Insurance company American International Group Inc rose 1.59 dollars or 2.3% to 69.63 dollars after its third-quarter profit more than doubled due to higher sales and a quiet hurricane season.

Tanox Inc, a drug developer, jumped 6.11 dollars, or 44.8%, to 19.75 dollars after it agreed to be acquired by pharmaceutical company Genentech Inc for 919 million dollars. Genentech was up 24 cents at 81.59 dollars.

Hormel Foods Corp rose 1.27 dollars, or 3.7%, to 36.10 dollars after the meat processor raised its forecasts for the fourth quarter as well as 2006 and 2007 amid strength in its speciality foods division.

InfoSonics Corp, which makes mobile phones, fell 1.60 dollars, or 27.6%, to 4.20 dollars after its third-quarter profit fell from the year-earlier period, which benefited from a gain.

Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where volume came to 1.42 billion shares compared with 1.86 billion yesterday.

The Russell 2000 index of smaller companies was up 7.09, or 0.93%, at 769.15.