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US stocks end flat as rally fizzles out

Oct 12 2012 07:39
AFP

New York - US stocks closed little changed on Thursday after a solid rally sparked by surprisingly good data on weekly jobless claims fizzled out, in part due to questions over the figures.

Trading action focused on Sprint Nextel, whose shares soared 14.3% to $5.76 on news that the third largest US wireless carrier was in talks to be bought by Japan's Softbank.

At the closing bell, the Dow Jones Industrial Average was down 18.58 points, at 13,326.39.

The S&P 500 gained 0.28 to 1,432.84, while the tech-rich Nasdaq lost 2.37 points to 3,049.41.

The market jumped from the opening after the Labour Department reported that weekly new claims for unemployment insurance fell sharply to their lowest in four and a half years, a good sign for the ailing US jobs market.

But later suggestions that the data might be somewhat incomplete helped take the air out of the rally.

Turnover was heavy in Sprint shares, which got a boost from reports that Japanese cell carrier Softbank was in talks to take it over, a move that could boost its ability to compete against powerful US market leaders Verizon and AT&T.

Sprint gave no details of the deal under discussion, only confirming that it involved "a potential substantial investment by Softbank in Sprint" that "could involve a change of control of Sprint."

Shares in other US carriers fell: Verizon lost 1.3%, AT&T 1.8%, and smaller rival MetroPCS, being taken over by T-Mobile, lost 3.3%.

Fedex gained 1.8% after it unveiled a sweeping global cost-cutting programme to deal with slowing world growth, including "several thousand" voluntary job cuts.

Boeing rose 1.4% after announcing a $5bn deal to sell 50 737 single-aisle jetliners to Alaska Airlines.

Alaska Air shares were flat.

On the Nasdaq, Apple lost 2%, and Dollar Tree fell 7.7%, traders giving the thumbs-down on its growth plans.

US bond prices gained. The 10-year Treasury yield was flat at 1.68%, while the 30-year yield fell to 2.86% from 2.88%.

Bond prices move inversely to yields.


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