US blue chip stocks ended a choppy session near the unchanged mark on Thursday as reports that Pakistani forces were closing in on a key al Qaeda figure tempered security fears. Technology stocks ended lower.
Stocks spent most of the session in negative territory, pushed lower by fears over disruption on the London-Paris Eurostar rail route, which turned out be a hoax.
The Dow Jones industrial average briefly showed gains in the afternoon, as news broke that No 2 al Qaeda leader Ayman Al-Zawahri may have been surrounded by Pakistani troops battling Qaeda fighters near Pakistan's border with Afghanistan. With no firm confirmation, the blue chip index later slid back to a small loss.
"We rallied quite a bit from the lows - people are quite happy to hear what happened and very encouraged by it," said Michael Palazzi, managing director in equity trading at S.G. Cowen. "But it is viewed as a short-term event so it's discounted pretty quickly."
Technology stocks did not bounce upward with the Dow, as investors braced for a volatile session on Friday as options expire on "quadruple witching" day.
The Dow Jones industrial average ended down 4.52 points, or 0.04 percent, at 10,295.78. The Standard & Poor's 500 Index-closed down 1.44 points, or 0.13 percent, at 1,122.31. The technology-focused Nasdaq Composite Index fell 14.32 points, or 0.72 percent, to 1,962.44.
Trading was moderate, with nearly 1.4 billion shares changing hands on the New York Stock Exchange, in line with the daily average for last year. About 1.7 billion shares were traded on Nasdaq, below the 1.8 billion daily average last year. Decliners outnumbered advancers by 5-to-4 on the NYSE and by 3-to-2 on Nasdaq.
A slew of economic reports added stability to the market. Data released on Thursday showed growth in US mid-Atlantic manufacturing slowed in March but remained at strong historic levels, while first-time jobless claims fell last week to a mark not seen since before the recession began in early 2001.
"On balance, the economic information was more on the positive side," said John Davidson, president of Partner Re Asset Management Corp. "The potential capture may have given the market a boost."
Microsoft, the world's largest software maker, weighed on the Dow and tech-dominated Nasdaq, after the top European Union regulator said the European Commission and the company failed to reach a settlement of monopoly charges. Microsoft shares fell 24 cents to $24.89.
United Technologies Corp leaned heavy on the Dow. The company stood by its earnings and revenue outlook for 2004 on Thursday, but said profit margins at its Chubb security unit will not expand amid high overhead costs. Its shares fell 97 cents to $87.83.Technology shares generally were hit by fears of heightened volatility due to the expiration of stock options, index options, index futures and single-stock futures on Friday, what market-watchers call "quadruple witching".
Chipmaker Intel Corp was the biggest weight on Nasdaq, falling 59 cents, or 2.1 percent, to $27.20.
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