NEW YORK (MarketWatch) — U.S. stocks on Wednesday barely managed to extend a winning run, with the Dow industrials and S&P 500 ending higher for a fourth day as Wall Street adopted a cautious tone.
“We’re seeing a lot of indication that things are not as bad as we thought they were, but the question is, how good are they? We’ve had a pretty strong market rally for simply going from bad to less bad. If it’s actually getting good, then we need to be prepared to put some money to work, but it seems like it is too early,” said Bruce McCain, chief investment strategist at Key Private Bank.
A far-reaching restructuring of labor markets in the euro-zone's periphery has developed over the last several years, to remedy what some see as a root cause of the crisis. (Photo: AP)
“Will a black hole open up in Europe that will suck the world economy into it? So far we’ve avoided that, but we’re still nervous,” added McCain of underlying market worries.
The Dow Jones Industrial AverageDJIA+0.05% climbed 7.04 points, or less than 0.1%, to 13,175.64, with 19 of its 30 components gaining, led by Hewlett-Packard Co. HPQ+2.37% , up 2.4% after the company hiked its third-quarter earnings forecast. Read more on Hewlett-Packard.
McDonald’s Corp. MCD-1.66% fell 1.7% after it reported revenue at restaurants open at least 13 months fell 0.1%.
“You get reports like McDonald’s today that reflect overseas weakness,” said McCain of the fast-food chain, the day’s biggest weight among the blue chips.
The S&P 500 index SPX+0.06% rose 1 point to 1,402.22, with consumer staples the best performing and consumer discretionary the worst among its 10 sectors.
Macy’s Inc. M+2.73% shares gained after the department-store chain reported better-than-expected income in its second quarter and hiked its 2012 guidance. Read more on Macy’s
The Nasdaq Composite Index COMP-0.15% fell 4.61 points to 3,011.25.
Advancers just outran decliners on the New York Stock Exchange, where composite volume neared 3.2 billion. The Nasdaq’s composite volume came close to 1.9 billion.
Oil prices CLU2-0.01% lost 32 cents to end at $93.35 a barrel in New York.
Treasury prices fell after the government sold $24 billion in 10-year notes, with yields10_YEAR+1.39% on the benchmark rising 2 basis points to 1.648%.
The sale “was poor as the yield was a few basis points above the when-issued, and the bid-to-cover of 2.49 was well below the previous 12-month average of 3.13 and the lowest since August ’09,” wrote Peter Boockvar, equity strategist at Miller Tabak, in emailed comments
The bottom line, according to Boockvar, is European Central Bank President Mario Draghi “ended the U.S. Treasury rally dead in its tracks on July 26 when he temporarily calmed markets and that certainly carried over to today’s auction.”
Kate Gibson is a reporter for MarketWatch, based in New York.