Wall Street closed flat on Thursday as a late rally fuelled by a pullback in oil prices balanced earlier worries over mounting inflationary and interest rate pressures.
The US Labor Department said import prices rose at their fastest pace for almost 15 years in September – 2.3 per cent – led by higher prices for energy. Import prices already had risen 1.2 per cent in August and are now 10 per cent higher than a year ago.
This added to jitters ahead of Friday’s release of September consumer inflation data. “This gives us concern that the overall CPI [consumer price index] is going to see a bigger pop,” said Marc Pado, chief market strategist at Cantor Fitzgerald.
However, the previously bearish Mr Pado argued that Wall Street was now approaching an “extremely oversold” level with much of the bad news now discounted, and it could be in for a technical bounce, potentially followed by a seasonal November rally.
With oil prices falling, the Dow Jones Industrial Average recovered to close just 0.32 of a point lower at 10,216.59, with the S&P 500 off 0.84 of a point, or 0.1 per cent, at 1,176.84.
The technology-heavy Nasdaq Composite rose 9.75 points, or 0.5 per cent, to 2,047.22, aided by Apple Computer jumping 9.1 per cent to $53.74, reversing two days of selling.
McDonald’s, the fast food chain, rose 1.2 per cent to $32.05. It said sales at outlets open for at least a year were 3.9 per cent higher in September than in the same month last year.
Johnson & Johnson, another Dow component, rose 3.6 per cent to $64.02 amid reports that it had filed an anti-trust lawsuit against Amgen, accusing the latter of illegally bundling products to force cancer clinics to use Amgen’s Aranesp drug rather than J&J’s treatment. Amgen reversed earlier weakness to close 1.4 per cent firmer at $75.82.
Nabi Biopharmaceuticals rose 4 per cent to $11.81 on good results from a consistency study for its staphylococcus vaccine.
But trading in scandal-hit derivatives broker Refco was halted after it plunged a further 27.2 per cent to $7.90, and shares in the Chicago Mercantile Exchange fell 2.7 per cent to $310.40 as the CME placed restrictions on Refco’s broker dealer.
Google, the search engine, fell 1.2 per cent to $297.44 and cable company Comcast lost 2.6 per cent at $27.20 on reports that the pair were in discussions to buy a stake in Time Warner’s America Online business for $5bn. Time Warner firmed 0.6 per cent to $17.59 on the news.
Houston oil company Bois d’Arc Energy rose 5.2 per cent to $14.95 after reporting that three of the four wells it had drilled recently in the Gulf of Mexico have been successful.
Central Coast Bancorp leapt 25.1 per cent to $24.30 as Rabobank, the Dutch financial services group, said it was buying its California-based peer for $371m in cash, or $25 a share.
Bell Microproducts plummeted 24.9 per cent to $7.36 as it forecast third quarter earnings of 7-9 cents a share, well below market forecasts of 16 cents.