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Stocks ended mixed with the Nasdaq Composite logging a seventh session of gains. However, a rise in oil prices and cautious trading ahead of a mid-week Federal Reserve meeting on interest rates limited any significant move to the upside.

Today, the Dow Jones industrial average closed down 5.77 or 0.05% to 11,550.44, the broader Standard & Poor’s 500 index closed up 1.31 or 0.10% to 1,320.65, and the Nasdaq composite index closed up 0.16 or 0.
01% to 2,234.15.

Market breadth turned negative. On the New York Stock Exchange, losers beat winners 16 to 15 on volume of 1.5 billion shares. On the Nasdaq, decliners edged out advancers as 1.94 billion shares changed hands.

Investors are being cautious ahead of the Fed meeting on Wednesday. Additionally, with oil inching back up some investors also thought the decline in crude is over. The Federal Reserve is widely expected to keep short-term rates steady. But market observers are starting to wonder when the central bank might want to consider lowering rates as the economy starts to show signs of softness. Today, the market was also made nervous by a report that Greenwich, Conn. based hedge fund Amaranth Advisors LLC may report a year-to-date decline of up to 35% due to heavy losses in the natural gas market. Some analysts feel that the market may see a short-term pullback.

In data news, investors did not react to the Commerce Department report that showed the U.S. current-account deficit widened to $218.4 billion in the second quarter from a revised $213.2 billion in the first quarter. This totals 6.6% of GDP and is the same as in the first quarter. This is against expectations of about $213 billion.
Shares of Intel moved up $0.14 or 0.7% to $19.65, after its researchers at the University of California said they’ve made a breakthrough in creating lasers on computer chips. This development could cut costs and improve the speed of communication networks and computers.

Stock of Applied Materials Inc. closed up $0.58 or 3.4% to $17.78, after the company stated that it had recently bought back $2.5 billion in stock under an accelerated buyback plan. The board has also approved a new buyback plan for up to $5 billion in stock over the next three years.

Shares of Symbol Technologies Inc. shot up $1.96 or 15.4% to $14.67 on a Wall Street Journal report that the wireless equipment firm is set to wrap up an auction that could see the sale of the $3.2 billion firm within days. The likely buyer is Motorola that closed up $0.10 or 0.4% to $24.95.

GM and Ford briefly discussed an alliance before dropping the idea. This lead GM to close down $0.18 to $31.48 and Ford to lose $0.20 or 3% to $7.82. Both companies are trying to turnaround their businesses amid massive losses in North America. Additionally, Thomas Weisel has lowered its rating on Ford to under-perform.
U.S. light crude oil for October delivery rose 47 cents to $63.80 a barrel on the New York Mercantile Exchange. Ongoing risks to global production prompted the market to recover part of last week’s loss. However, gains were capped by expectations for lower oil demand and strong production.

All the best,
Manuel Jesus-Backus
The Portfolio Crafter
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