NEW YORK -- U.S. stocks closed mixed yesterday as a late rally in auto shares helped the Dow Jones industrial average rise for the first time in four days.
Computer-guided "buy" orders lifted stocks in the final hour after General Motors Corp. and Chrysler Corp. both posted increases in U.S. car and truck sales for August.
"Those numbers certainly helped the market," said Edward Collins, executive vice president of institutional equity trading at Daiwa Securities America Inc.
The Dow industrials rose 13.12 to close at 3898.70 after falling as much as 8.41 points earlier in the day. GM, leading the rise, soared $2.125 to $52.25, followed by American Express Co. and Eastman Kodak Co.
The Standard & Poor's 500 index climbed 0.87 to 471.86, after falling as much as 1.35 points. Autos led the way, with Ford Motor Co. rising 37.5 cents to $30 and Chrysler Corp. gaining $1 to $48.50. Semiconductors, retailers and oil companies also rose, while electric utilities, beverages and health-care shares declined. The Nasdaq composite index added 0.25 to 759.48.
Still, 11 stocks dropped for every nine that rose on the Big Board. The Russell 2000 index fell 0.39 to 255.80, the American Stock Exchange market value index rose 0.46 to 456.00, and the Wilshire 5000 Index slumped 13.88 to 4,669.20.
The computer-guided buy orders whipped prices around more than usual because of the dearth of traders at work. Many people were extending yesterday's Labor Day holiday or observing the Jewish New Year.
Barely 200 million shares changed hands on the New York Stock Exchange.
The surge in auto stocks offset slumps in bonds and the dollar, which together reinforced the notion that inflation is kicking up. The car sales also allayed the concern generated by Friday's disappointing employment report that corporate profit
growth won't keep pace with interest-rate increases.
Stocks were lower for most of the day amid more signs that
inflation may be building. Besides higher prices for gold and oil yesterday, last week's employment report showed average hourly earnings rose to $11.13 in August from $11.11 in July. Last Thursday, the National Association of Purchasing Managers said its index of prices paid by businesses rose to 74.5 in August from 73.1 in July.
The reports revived concern that the Federal Reserve might raise interest rates for a sixth time this year to curb inflation. "Further actions might be necessary to get some of the steam out of the economy," said Kidder's Mr. Laux.
Takeover speculation buoyed shares of companies in the hotel and media industries. Hilton Hotels Corp. soared as much as $7.875 after USA Today's Dan Dorfman reported that the lodging and gaming company may be a target for takeover by an investor group. The stock later retreated to close up $5.625 at $64.375 after the company said it wasn't in talks about a sale or asset spinoff.
Multimedia Inc. added 62.5 cents to $31.625 after investor Mario Gabelli told the Wall Street Journal that the company may be a merger target.
Plaza Home Mortgage Corp. jumped $1.375 to $9.625 after Fleet Financial Group Inc. said it plans to buy the mortgage company for $10.125 a share, or $120 million.