June 16th, 2010
05:46 PM ET

Stocks flat amid mixed economic news

A look at highlights from the day's business news:

Stocks end flat after choppy session

U.S. stocks recovered from deep losses Wednesday and finished a choppy session near the previous day's closing levels as investors considered mixed economic news and BP's agreement to establish a $20 billion escrow fund and cancel its quarterly dividend.

The Dow Jones industrial average closed up 5 points, or 0.1 percent. It was down
by as much as 72 points earlier in the session, following a disappointing report on the housing market.

The S&P 500 index finished less than 1 point down, or 0.1 percent, and the Nasdaq composite added half a point.

Stocks had gained Tuesday as fears about Europe's debt crisis continued to fade and the euro rallied, rising above the $1.23 level for the first time in more than a week. The three major indexes added more than 2 percent and finished above key milestone levels.

That momentum diminished Wednesday as investors faced disappointing economic reports and less-than-stellar corporate news. But it began to resurface after Obama administration officials confirmed that BP agreed to put roughly $20 billion in an escrow account to payout claims from the oil spill disaster in the Gulf of Mexico.

Dollar little changed after mixed reports

The dollar was little changed against foreign currencies Wednesday as investors took a breather after mixed economic reports and stocks' rally the day before.

The dollar rose 0.1 percent against the euro to $1.2321 and lost about 0.1 percent on the British pound to $1.4822. The greenback was flat against the Japanese yen at ¥91.40.

Investors were disappointed by reports that showed both new home construction and the Producer Price index, a key measure of wholesale inflation, fell in May. But good news came from the Federal Reserve, which reported industrial production climbed last month at a rate better than economists' expected.

The mixed reports, following a more than 2 percent rally in stock markets on Tuesday, had currency traders in a wait-and-see mode Wednesday.

Oil little changed, around $77 a barrel

Oil prices were little changed Wednesday after a government report showed crude stockpiles increased more than expected and BP agreed to put $20 billion in an escrow account to pay claims from the Gulf of Mexico oil spill disaster.

Crude oil for July delivery inched up slightly by 73 cents, or just under 1 percent, to settle at $77.67 a barrel Wednesday.

The national average price for a gallon of regular unleaded gasoline rose to $2.70 from the previous day's price of $2.696, according to motorist group AAA. That increase snapped nine straight days of declines.

Crude stockpiles increased by 1.7 million barrels in the week ended June 11, according to a report by the U.S. Energy Information Administration Wednesday morning.

The report showed oil supplies exceeded inventory limits across all three major categories including crude, gasoline and distillates. Higher than expected inventories often drive prices down, but later in the day, prices rebounded slightly after a White House official confirmed BP has tentatively agreed to put $20 billion into an escrow account to cover costs related to the oil spill in the Gulf of Mexico.

Treasurys rise on renewed Spain fears

Treasurys turned higher Wednesday after renewed fears about Spain's debt pushed investors back to the safe-haven appeal of U.S. bonds.

The benchmark 10-year note rose 7/32 to 101-27/32, with a lower 3.29 percent yield. Bond prices and yields move in opposite directions.

The 30-year bond climbed 6/32 to 102-26/32, yielding 4.21 percent. The five-year
note rose 2/32 to 100-9/32 and yielded 2.067 percent, while the two-year inched up 1/32 to 100, yielding 0.75 percent.

A report by Spanish newspaper El Economista that said the International Monetary Fund, the European Union and the U.S. Treasury are preparing a $308 billion bailout for debt-strapped Spain renewed worries about Europe's fiscal crisis. Those fears drove up the demand for Treasurys, which are considered a low-risk investment in times of economic uncertainty because they're backed by the U.S. government.

A report that showed both new home construction and building permits fell sharply in May also gave a boost to U.S. debt.

CNNMoney.com reporters Hibah Yousuf, Annalyn Censky and Julianne Pepitone contributed to this report.


Filed under: Economy
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