Associated Press
08.09.2004

Stocks were mixed in early trading Monday as investors regrouped from last week's steep declines and looked toward the upcoming Federal Reserve meeting for guidance on the economy.

Trading was expected to be light in advance of Tuesday's Fed meeting, at which the Open Market Committee will decide whether to raise interest rates by a quarter percentage point to 1.5 percent. While the move had been widely expected before last week, a string of bad news has left Wall Street wondering whether the Fed will - or should - raise the benchmark rate.

The markets sold off heavily last week as oil prices climbed to new highs and the government reported a paltry 32,000 jobs created in July. The combination left investors concerned that inflation might take hold in an economy that threatens to slow down considerably.

In the first hour of trading, the Dow Jones industrial average rose 1.77, or 0.02 percent, to 9,817.10.

Broader stock indicators were narrowly mixed. The Standard & Poor's 500 index was up 0.81, or 0.1 percent, at 1,064.78, and the Nasdaq composite index dropped 0.43, or 0.02 percent, to 1,776.46.

The government reported that wholesale inventories rose 1.1 percent in June. Wall Street had been expecting a 0.6 percent rise for the month. While the inventory figure shows strong industrial productivity, it also raises questions on whether supply may soon outpace a reduced consumer demand.

Investors paid close attention to oil prices, which climbed once again as Russian railroads refused to ship oil from petroleum giant Yukos on credit. A barrel of light crude was quoted at $44.34, up 39 cents, on the New York Mercantile Exchange.

Charter Communications Inc. climbed 4 cents to $3.12 after posting a loss of $1.35 per share for the quarter. The media company assumed new pre-tax losses that it had previously applied to a subsidiary.

Cablevision Systems Corp. swung to a loss in the second quarter due to investment losses and poor performance in its satellite and cinema divisions. The company did improve its outlook, however. Cablevision was up 46 cents to $17.60.

McDonald's Corp. rose 27 cents to $26.61 after posting a 6.4 percent rise in same-store sales in July, crediting the boost on better menu options for healthy eating and better service.

Citigroup gained 21 cents to $23.40 after announcing the purchase of Knight Trading Group Inc.'s derivatives business for $225 million in cash. Knight was up 87 cents at $9.16.

Advancing issues outnumbered decliners by nearly 2 to 1 on the New York Stock Exchange, where volume came to 201.12 million shares, compared to 191.9 million at the same point on Friday.

The Russell 2000 index of smaller companies was up 0.27, or 0 percent, at 519.92.

Overseas, Japan's Nikkei stock average fell 0.6 percent. In afternoon trading, Britain's FTSE 100 was down 0.7 percent, Germany's DAX index tumbled 1.1 percent, and France's CAC-40 dropped 0.9 percent.

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