By Dan Strumpf And Saumya Vaishampayan
U.S. stocks eased Thursday, though the Nasdaq Composite resumed
its march toward record territory, as investors looked to another
muted reading on inflation.
The Dow Jones Industrial Average fell 15 points, or 0.1%, to
18209, pulling back from Wednesday's record close. The S&P 500
shed three points, or 0.1%, to 2111.
The tech-heavy Nasdaq Composite gained 13 points, or 0.3%, to
4980--less than 2% away from its record close of 5048.62 last
reached 15 years ago.
Trading activity was muted, as the fourth-quarter earnings
season drew to a close and fears over Greece's bailout continued to
recede. Tom Carter, managing director at JonesTrading, said the
absence of market-moving headlines was prompting some investors to
curtail winning bets.
"They look at their portfolio and there are stocks that have
ripped, that have done nicely," he said. That leads them to think,
"I'm going take some money off the table and I'm going to redeploy
it."
European stocks and bonds closed higher as the European Central
Bank prepares to launch its bond-buying program. The bank will buy
EUR60 billion (around $68 billion) of bonds each month until
September 2016 under the program, which starts next month.
Germany's DAX rose 1% to a fresh record close, while and France's
CAC 40 added 0.6% and finished at its highest level since June
2008.
Easy monetary policy has helped stocks rally since the financial
crisis, as low interest rates make returns on stocks appear more
attractive than those on competing assets. While the Federal
Reserve ended its bond-buying program last year and is looking to
an eventual increase in rates, many investors say that aggressive
stimulus efforts from other major central banks should help keep
global rates low.
"Markets, especially on the equity side, have become dependent
on central bank stimulus," said Chris Gaffney, senior market
strategist at EverBank Wealth Management. "Keeping interest rates
low and putting additional liquidity in the market certainly
creates an environment that's very good for corporations," he said,
which leads to better earnings and stock-market gains.
Meanwhile, trading activity and market volatility have declined
in recent weeks as investors await other market moving news. The
CBOE Volatility Index, or VIX, hovered around it lowest level since
early December, recently edging up to 13.86.
"Once you come off that cycle of big macro headlines, you sit
around and wait for what's next," said Larry Weiss, head of trading
at Instinet. Stocks "are kind of range bound," he said.
The Dow industrials hit its third record close for the year on
Wednesday, adding 0.1% to 18224.57. The S&P 500 lost 0.1% to
2113.86, and the Nasdaq Composite slipped 0.98 point to 4967.14,
halting a 10-session streak of gains.
While investors continue to bet on when the Fed will raise
short-term rates, which have been held near zero since December
2008, Mr. Gaffney expects an increase to come this year. He said he
is encouraged by Wal-Mart Stores Inc.'s plans to boost wages for
its U.S. employees, which could add pressure on other companies to
do the same. On Wednesday, TJX Cos. announced it also would
increase wages for its U.S. workers, following Wal-Mart's lead.
A pickup in wages could make the Fed more comfortable about
raising rates this year, he added.
In economic news, the consumer-price index fell 0.7% in January
from December, the Labor Department said Thursday. Prices slipped
0.1% from a year earlier, marking the first year-over-year decline
since October 2009. Economists surveyed by The Wall Street Journal
expected a 0.6% decline in January from December.
Jobless claims in the week ended Feb. 21 rose by 31,000 to
313,000, the Labor Department said Thursday. Economists polled by
The Wall Street Journal had expected 290,000 new claims.
Separately, orders for durable goods climbed 2.8% in Januaryfrom
a month earlier, more than the 0.6% increase expected by
economists.
In other markets, gold futures rose 0.9% to $1211.80 an ounce.
Crude-oil futures fell 2.1% to $49.90 a barrel. Treasury prices
fell, lifting the 10-year yield to 1.977% from 1.968% on
Wednesday.
Among individual stocks, Morgan Stanley agreed to pay $2.6
billion to settle U.S. claims linked to the sale of mortgage bonds.
Shares fell 0.9%.
Salesforce.com Inc. posted a 26% jump in quarterly revenue from
a year ago, driven in part by international sales. Deferred
revenue, a closely watched metric for the company, rose 32% in its
fiscal fourth quarter. Shares advanced 11%.
Write to Dan Strumpf at daniel.strumpf@wsj.com and Saumya
Vaishampayan at saumya.vaishampayan@wsj.com
Access Investor Kit for The Dow Chemical Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US2605431038
Access Investor Kit for The NASDAQ OMX Group, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US6311031081
Access Investor Kit for Wal-Mart Stores, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US9311421039