NEW YORK – Technology stocks rose yesterday as Cisco Systems' profit and outlook reinforced optimism over earnings, while blue chips ended little changed as an oil price drop weighed on energy shares.
Data showing slower growth in fourth-quarter wages and a jump in productivity supported the view that the Federal Reserve has no need to raise interest rates for now.
The slide in oil futures prices, which had provided support to the broader market earlier in the session, dragged down the shares of major energy companies such as Exxon Mobil Corp.
Despite indecision shown by the Dow Jones industrials, which were up for much of the day but ended essentially flat, stocks rose moderately overall. Advancing issues outnumbered decliners by about 3 to 2 on the New York Stock Exchange, where consolidated volume came to 2.62 billion shares, compared with 2.63 billion Tuesday.
The Dow inched up 0.56, or less than 0.01 percent, to 12,666.87. The Dow moved past 12,700 for the first time, trading as high as 12,700.28. The previous trading record of 12,683.93 was set Friday.
Broader stock indicators showed more substantive gains. The Standard & Poor's 500 index rose 2.02, or 0.14 percent, to 1,450.02, and the tech-focused Nasdaq composite index, responding to Cisco's news, rose 19.01, or 0.77 percent, to 2,490.50. The Russell 2000 index of smaller companies, which surpassed 800 for the first time last week, set a new closing and trading high of 816.20 after rising 5.79, or 0.71 percent.
Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.75 percent from 4.77 percent Tuesday. The dollar was mixed against other major currencies, while gold prices fell.
Light, sweet crude settled down $1.17 at $57.71 per barrel on the New York Mercantile Exchange. It had been up briefly after the Energy Department's weekly domestic inventory data showed a small decrease in crude stockpiles.
“Crude hasn't been able to get above $60 for three days, so the energy names are weak,” said Neil Massa, equity trader at John Hancock Funds.
Massa suggested some investors simply were taking profits.
Al Goldman, chief market strategist with A.G. Edwards & Sons, said yesterday's trading reflects “a normal pause” and, more specifically, a pullback in the energy companies.
“The price of oil dropped dramatically and they tend to be major factors over all,” Goldman said of the energy companies.
Still, he remains confident in the market's prospects.
“We've come a long way, and we're just taking a time out,” Goldman said.
Among energy stocks moving lower after the drop in oil, Exxon Mobil Corp., part of the Dow industrials, closed down 35 cents at $74.79, while Chevron Corp. fell 73 cents to $72.64. ConocoPhillips slipped 41 cents to $66.23.
Cisco rose 81 cents, or 3 percent, to $28.09 after Tuesday's prediction that third-quarter revenue would rise as much as 20 percent.
News Corp. advanced 55 cents to $24.70 after the media conglomerate's fiscal second-quarter earnings were stronger than expected.
Multi-Fineline Electronix Inc., which makes circuit boards, rose $2.70, or 15.4 percent, to $20.28, although its fiscal first-quarter profit came in below Wall Street's expectation. Some analysts suggested the company's revenue had hit a low point.
Overseas, Japan's Nikkei stock average closed down 0.66 percent. Britain's FTSE 100 closed up 0.37 percent, Germany's DAX index was up 0.58 percent, and France's CAC-40 finished up 0.46 percent.
