Newspaper article THE JOURNAL RECORD

Stock Indexes Inch Higher; Traders Seek Inflation Clues

Newspaper article THE JOURNAL RECORD

Stock Indexes Inch Higher; Traders Seek Inflation Clues

Article excerpt

NEW YORK (AP) -- Some signs of slowing economic activity helped calm financial markets Tuesday, lifting stocks as interest rates eased. But stock trading remained gridlocked in advance of other pivotal clues on inflation that are due this week.

The Dow Jones industrial average rose 47.34 points to 5,481.93, bolting higher at midafternoon after slipping into negative territory several times during the session.

Broader market measures also hovered near opening levels most of the day before pulling higher near the close.

"Nobody really wants to make a major commitment to the stock market before those reports" later this week, said Hugh Johnson, chief investment officer at First Albany Corp., referring to key readings on wage inflation in July and the health of the manufacturing sector.

Bonds advanced in the morning after the first of this week's potentially explosive economic reports came in with no major surprises. The yield on the 30-year Treasury bond -- a benchmark for many types of loans -- fell to nearly 7.03 percent from 7.09 percent Monday.

The government reported that employment costs -- a key element of inflation -- increased slightly less than expected in the second quarter. The employment cost index is regarded as the best measure of labor costs, which represent two-thirds of a product's price.

Bond investors also were heartened by news that sales of new homes slipped more than expected in June, holding out hope that consumer demand has slowed, easing another inflationary pressure.

But the stock market's enthusiasm was muted by the paralysis that has come to grip the market before every monthly employment report, which has spurred steep selloffs four times since early March with revelations of inflationary growth in new jobs and hourly wages.

"The employment cost index didn't produce much of a reaction because it was fairly in line with expectations. …

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