Stocks End Little Changed Ahead of Jobs Report

Stocks ended mostly flat in dull trading Wednesday as many investors went to the sidelines ahead of Friday’s key report on U.S. employment trends.

Treasury bond yields rose for a third day, but they pulled back from their midday highs after a cautious-sounding Federal Reserve report on the economy.

The dollar also continued to advance, though at a slower pace than in recent days.

Traders said Wall Street was searching for direction after key indexes rallied to near 32-month highs Monday, then dropped Tuesday.

The Dow Jones industrial average finished up 1.63 points, or 0.02%, at 10,593.11 after spending most of the session in negative territory.

Broader indexes were mixed. The Nasdaq composite index declined 6.29 points, or 0.3%, to 2,033.36, while the Standard & Poor’s 500 added 1.94 points, or 0.2%, to 1,151.04.

Winners and losers were nearly evenly matched on the New York Stock Exchange and on Nasdaq.

Generally good economic news and strong fourth-quarter corporate earnings have raised hopes about the recovery, but a pattern of uneven trading has developed in recent weeks as investors have focused on the potential for interest rates to rise with the economy.

Stocks were clipped modestly Tuesday after Federal Reserve Chairman Alan Greenspan reiterated his view that rates must go up eventually.

On Monday, a better-than-expected report on employment trends in the manufacturing sector stoked expectations that Friday’s government report on February job growth would show a hefty increase, further bolstering optimism about the economy.

That sentiment helped to boost the beaten-down dollar, which soared Tuesday to a four-month high against the yen and nearly a three-month high against the euro.

But on Wednesday, the Fed’s “beige book” report on the economy said employment still was growing slowly.

That put a lid on bond yields: The 10-year Treasury note yield was at 4.09% at midday, up from 4.04% on Tuesday, but ended the day at 4.05%.

The dollar also was restrained. It ended at 110.07 yen in New York, up from 110.06 on Tuesday. The euro fell to $1.219 from $1.222.

With Friday’s employment report looming, “There has been a lot of talk about how more jobs had been added. But the number would have to come in a very big surprise on the upside ... for the dollar to rally” further, said Brian Taylor, managing director of currency trading at Manufacturers and Traders Bank in Buffalo, N.Y.

Still, many analysts believe that the trend of the markets in the next few months is likely to favor modestly higher stock prices, higher bond yields and a stronger dollar.

In other trading Wednesday, gold continued to sink as the dollar edged up. Near-term gold futures in New York dipped $1.10 to $392.40 an ounce.

Among the day’s highlights:

* Heavy-industry shares were mostly lower amid caution on the economy. Alcoa fell 69 cents to $37.02, GM fell 65 cents to $47.95 and Nucor was off 73 cents to $64.65.

* Some investors continued to favor so-called defensive stocks that might fare well even if the economy slowed. A Bloomberg News index of real estate investment trust shares rose 0.5% to a record high. Gainers included Public Storage, up 60 cents to $49, and Duke Realty, up 51 cents to $31.25.

* Wal-Mart Stores rose 81 cents to $60.36. The company late Tuesday said it raised its quarterly dividend 44%, to 13 cents a share. The new annual dividend of 52 cents a share gives the stock an annualized yield of 0.9% at Wednesday’s price.

* Genentech surged $3.49 to $108.74. After the close of regular trading, the company approved a 2-for-1 stock split.