Stocks managed to end the day with modest gains Wednesday despite more downbeat economic news and a lack of a bailout for a key bond insurer.
The Federal Reserve’s “Beige Book” summary of economic conditions and declines in service sector activity, factory orders and the ADP employment report painted a picture of a weakening economy, and Ambac Financial’s plan to raise money by selling stock raised doubts that the company will be getting a bailout from banks despite weeks of talks.
The Ambac news hit the market particularly hard, turning 1% gains for the major indexes into a loss before stocks recovered.
Thursday’s pending home sales report and Friday’s U.S. government jobs report will be the next big economic reports. Economists are looking for a gain of just 25,000 jobs in February.
Yahoo rose 2% after putting off the deadline for nominations to its board of directors, delaying a potential proxy fight with Microsoft as the company continues to explore its options, such as a possible combination with Time Warner’s AOL unit.
Oracle gained 2% after saying it will announce quarterly results on March 26, which investors took as a sign that the company will meet forecasts.
Packeteer jumped 28% on a private equity buyout offer.
Logility, American Software and NaviSite plunged on their results.
In late trading, Motorola gained after investors Carl Icahn upped his stake in the company.
The Nasdaq rose 12 to 2272, the S&P gained 7 to 1333, and the Dow rose 41 to 12,254. Volume declined to 4.28 billion shares on the NYSE, and 2.27 billion on the Nasdaq. Advancers led by a 20-13 margin on the NYSE, and 15-13 on the Nasdaq. Upside volume was 62% on the NYSE, and 65% on the Nasdaq. New highs-new lows were 41-143 on the NYSE, and 51-192 on the Nasdaq.
