Stocks trade in tight range as investors remain wary about economic recovery; Hasbro, CVS rise
Stocks traded mixed Monday as investors remained wary about the strength of the economic recovery and mounting debt in Europe.
The market’s major indexes held to a tight range and were nearly unchanged at midday, recovering from an early slide. Stocks have traded erratically in the past four weeks as investors try to determine whether a global economic recovery is sustainable.
Concerns are growing that some European countries including Greece, Portugal and Spain might not be able to handle their mounting levels of debt. Stocks have also been hurt by China’s plans to contain economic growth and the Obama administration’s proposed rules to restrict trading by large financial institutions.
The questions have investors on edge about whether the global economy can maintain a recovery. Stocks have climbed for 10 months on hopes of a rebound after hitting 12-year lows last March.
Investors are looking for fresh evidence of economic growth. The recent troubles demonstrate a recovery might not be happening as fast as some had hoped. The concerns have hit stocks. The Dow Jones industrial average is down 713 points, or 6.7 percent, since closing at a 15-month high of 10,725.43 on Jan. 19.
Brett Hryb, a portfolio manager with MFC Global Investment Management in Toronto, said he was encouraged by the market’s ability to hold its ground Monday as traders sort through questions about debt in Europe.
Hryb said the concern is that the financial troubles in a country like Greece will spill into other markets. “Clearly Greece itself is nothing. It’s just a blip. It’s what the contagion could be,” he said.
In midday trading, the Dow fell 12.77, or 0.1 percent, to 9,999.46 after being down as much as 78 points after the opening bell. On Thursday, the Dow traded below the psychological barrier of 10,000 for the first time since November.
The broader Standard & Poor’s 500 index rose 3.87, or 0.4 percent, to 1,070.06, while the Nasdaq composite index rose 10.31, or 0.5 percent, to 2,151.43.
Bond prices fell, pushing their yields slightly higher. The yield on the benchmark 10-year Treasury note rose to 3.59 percent from 3.57 percent late Friday.
The dollar was mixed against other major currencies, while gold rose.
Crude oil rose 73 cents to $71.92 per barrel on the New York Mercantile Exchange.
In earnings news, the toymaker Hasbro Inc. said its profit surged 77 percent in the fourth quarter while drugstore chain CVS Caremark Corp. said its earnings rose 11 percent. The results beat analysts’ estimates.
Hasbro jumped $4.15, or 13.5 percent, to $34.95, while CVS rose $1.97, or 6.3 percent, to $33.03.
Three stocks rose for every two that fell on the New York Stock Exchange, where volume came to 392.6 million shares compared with 550.3 million shares traded at the same point Friday.
The Russell 2000 index of smaller companies rose 0.88, or 0.2 percent, to 593.86.
In afternoon trading, Britain’s FTSE 100 rose 0.4 percent, Germany’s DAX index gained 0.9 percent, and France’s CAC-40 rose 1 percent. Earlier, Japan’s Nikkei stock average fell 1.1 percent.