NEW YORK (AP) — Wall Street managed a tentative advance Tuesday as investors took in a mix of economic and corporate news and waited for the Federal Reserve to issue its latest assessment of the economy.
The government issued better-than-expected reports on housing and inflation, while Alcoa Inc. said it was cutting its dividend and Nokia Corp. announced it was laying off 1,700 workers.
The market fluctuated throughout the session. Investors are unlikely to make many moves ahead of the Fed’s two-day meeting that ends Wednesday afternoon, said Craig Peckham, a market strategist at Jefferies & Co. The Fed is widely expected to leave interest rates at their current historically low levels, but the market will be keen to see how the central bank sizes up the economy in its statement that accompanies its rate decision.
Still, the market was showing signs of keeping the more upbeat tone it has had over the past week, even after its four-day rally was cut short Monday. Peckham said it was encouraging that Alcoa’s dividend cut did not send “shockwaves” through the market, as it would have done just weeks ago.
“Investors are able to brace themselves for this kind of news” now, he said.
Brett D’Arcy, chief investment officer at CBIZ Wealth Management, said relatively flat trading the past two days is “a great sign” because it means investors are holding on o gains from week and aren’t trying to grab quick profits. That is an indication of positive momentum and a base forming for the market, he added.
Both the Dow Jones industrial average and Standard & Poor’s 500 index gained around 10 percent last week.
In early afternoon trading, the Dow rose 26.20, or 0.36 percent, to 7,243.17. The S&P 500 rose 5.73, or 0.76 percent, to 759.62, while the tech-laden Nasdaq composite index rose 19.29, or 1.37 percent, to 1,423.31.
D’Arcy said technology companies could be getting an extra boost as investors move back into those stocks after they fell sharply Monday. He said the industry’s relative fundamental strength makes it attractive for long-term investors.
The Russell 2000 index of smaller companies rose 4.37, or 1.13 percent, to 390.73.
Advancing issues outpaced decliners by about 8 to 5 on the New York Stock Exchange, where volume came to 361 million shares.
Tuesday’s economic data followed a handful of reports over the past few weeks that were better than expected; that gave some support to stocks.
The Commerce Department said new home construction rose unexpectedly to an annual rate of 583,000 in February from a revised 477,000 in January. Economists forecast construction would drop to a pace of around 450,000 units, according to Thomson Reuters. Building permit applications, a key measure of future activity, also rose unexpectedly.
Tim Courtney, the chief investment officer at Burns Advisory Group, said the report was encouraging and could be part of an initial recovery in the housing market.
“We could be in the very early stages of some kind of normalization” in housing, he said. A housing recovery is widely seen as a key to helping end the recession.
Separately, the Labor Department said wholesale prices rose 0.1 percent in February after rising 0.8 percent in January. Economists predicted the producer price index would rise 0.4 percent during the month. The government said core inflation, which excludes energy and food, edged up 0.2 percent in February after rising 0.4 percent in January.
While investors wait for the Fed meeting to end, Peckham said individual company announcements can have a bigger impact on the market.
Alcoa became the latest Dow Jones industrial to lower its dividend to conserve cash. The aluminum maker said after the market closed Monday it was cutting its quarterly dividend 82 percent to 3 cents. It also said it plans to sell stock and debt to help reduce annual costs by more than $2.4 billion.
“We’re seeing a management team remind us just how tough the fundamental economy is performing,” Peckham said. Alcoa fell 52 cents, or 8.5 percent, to $5.60.
Nokia, the world’s top mobile phone maker, said it will lay off 1,700 people worldwide to cut costs. Nokia fell 21 cents to $11.14. The mobile phone market has been suffering as consumers spend less during the recession.
Meanwhile, bond prices mostly rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.93 percent from 2.96 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, was flat at 0.23 percent compared with late Monday.
The dollar mostly rose against other major currencies, while gold prices fell.
Oil prices rose $1.08 to $48.43 a barrel on the New York Mercantile Exchange.
Overseas, Japan’s Nikkei stock jumped 3.2 percent. Britain’s FTSE 100 fell 0.8 percent, Germany’s DAX index declined 1.9 percent, and France’s CAC-40 fell 1.4 percent.
