Stocks retreat a day after Dow approached 11,000; Fed to release minutes from last meeting

By Stephen Bernard, AP
Tuesday, April 6, 2010

Stocks pull back as Dow hovers near 11,000

NEW YORK — Stocks retreated Tuesday after a steady climb pushed the Dow Jones industrial average near 11,000 for the first time in 18 months.

There are few catalysts on the calendar that are likely to sway trading in the coming days as companies prepare to begin releasing first-quarter earnings next week. The Federal Reserve plans to release the minutes from its March 16 interest rate-setting committee meeting Tuesday afternoon. The Fed kept its key rate at a historic low during the meeting to continue its easy money policy to help generate growth.

Investors are looking for signs of when the Fed might hike rates to combat eventual inflation.

The small pullback in futures comes as the Dow approaches the psychological milestone of 11,000. The Dow came within 12 points of hitting 11,000 on Monday before easing off its highs for the day. That would’ve been the first time it eclipsed that level since Sept. 29, 2008, before the credit crisis peaked.

Stocks have been rising in recent months as new reports show the economy is slowly improving. There have been few pauses during the recent gains that have seen the Dow rise in each of the past five weeks, its longest winning streak since mid-April last year.

In late morning trading, the Dow fell 17.92, or 0.2 percent, to 10,955.63. The Standard & Poor’s 500 index fell 1.13, or 0.1 percent, to 1,186.31. The Nasdaq composite index fell 3.43, or 0.1 percent, to 2,426.10.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.95 percent from 3.99 percent late Monday.

The 10-year yield climbed above 4 percent during trading Monday for the first time since June. It is approaching levels not seen since October 2008.

The Treasury Department is scheduled to auction three-year notes Tuesday afternoon. Weak demand at recent auctions, along with signs of economic recovery, have helped drive prices down and yields higher.

The dollar rose against other major currencies. Gold rose.

Crude oil rose 29 cents to $86.91 per barrel on the New York Mercantile Exchange.

Shares of Massey Energy Co. fell after an underground explosion blamed on methane gas killed 25 coal miners about 30 miles south of Charleston, W.Va. It was the worst U.S. mining disaster in more than two decades.

Four others were missing Tuesday following the explosion about 1.5 miles from the entrance to Massey’s Upper Big Branch mine.

The stock fell $5.28, or 9.7 percent, to $49.41.

In other trading Tuesday, the Russell 2000 index of smaller companies rose 1.06, or 0.2 percent, to 698.71.

Advancing stocks narrowly outpaced those that fell on the New York Stock Exchange, where volume came to 286.3 million shares compared with 268.7 traded at the same point Monday.

In afternoon trading, Britain’s FTSE 100 rose 0.6 percent, Germany’s DAX index rose 0.2 percent, and France’s CAC-40 rose 0.4 percent. Earlier, Japan’s Nikkei stock average fell 0.5 percent.

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