The Associated Press
NEW YORK (AP) - The stock market is running out of reasons to go higher.
After rocking between gains and losses Wednesday, the Dow Jones industrials managed to rise for a seventh straight day, marking another high for the year.
But there was hardly any excitement. The Dow rose just 4 points, while other major indexes gained less than 1 point despite positive reports on home sales and factory orders.
An increasingly cautious mood has gripped the market in recent days, following a period of fervid buying this spring and summer that sent stocks up more than 45 percent since early March. While economic data is showing modest improvement, investors are worried stocks may have overshot the economy's recovery.
"The market jumps and then it sort of fades again," said Keith Walter, portfolio manager at Artio Global Equity Fund. "There's not a lot of commitment here."
With trading volume and news flow tapering down amid Wall Street's annual summer slowdown, analysts say there are few near-term catalysts that could get the market's rally going again.
"We seem to be floating up on air," said Andrew Frankel, co-president of Stuart Frankel&Co.
Stocks seesawed without a clear direction despitea Commerce Department report that said new home sales rose 9.6 percent in July for the fourth straight monthly increase. Sales rose to 433,000, the strongest pace since September and well above the 390,000 figure economists expected.
The latest sign of improvement in housing didn't do much to impress investors, though, who have already factored in a recovery in the long-suffering home industry. Some of the latest gains can be attributed to a federal tax credit for first-time home owners currently set to expire in November, and the industry has been pressing Congress to extend it.
Separately, the Commerce Department said orders for goods expected to last at least three years rose 4.9 percent in July - the biggest jump in two years and more than the 3 percent increase economists had expected.
However the overall increase was driven by a surge in orders for transportation equipment, which benefited from the government's recently expired Cash for Clunkers program that drove thousands of people to trade in older cars for new ones. Excluding transportation goods, orders rose 0.8 percent, just short of analysts' expectations.
The Dow rose 4.23, or 0.04 percent, to 9,543.52. Over the past seven days, the Dow has risen 408 points, or 4.5 percent. The last time the Dow posted such a long winning streak was on July 21, when its seven-day gain came to 770 points, or 9.4 percent.
The Standard&Poor's 500 index rose 0.12, or 0.01 percent, to 1,028.12, while the Nasdaq composite index rose 0.20, or 0.01 percent, to 2,024.43.
Declining stocks narrowly outnumbered advancers on the New York Stock Exchange, where consolidated volume came to a light 5.10 billion shares, down from 5.74 billion shares on Tuesday.
In other trading, the Russell 2000 index of smaller companies rose 0.80, or 0.1 percent, to 584.02.
Shares of homebuilders surged for a second day after the housing data showed the supply of new homes on the market shrank to the lowest level since April 2007. If supply is decreasing, builders may need to ramp up production.
Hovnanian Enterprises Inc. rose 43 cents, or 9.4 percent, to $5, tacking on to its 6.5 percent jump the day before. The stock is now at its highest level since October. Lennar Corp. rose 61 cents, or 4.1 percent, to $15.58 - its highest point since September.
Sharp declines in industrial and material stocks weighed on the market as commodities prices wavered. A long rally in commodities prices that started earlier this year has been sputtering in recent weeks amid concerns of waning demand from China.
Oil prices fell further Wednesday after the government reported an increase in crude supplies. Light, sweet crude fell 62 cents to $71.43 a barrel on the New York Mercantile Exchange.
Government bond prices were little changed despite favorable demand at an auction of $39 billion in five-year notes. The yield on the benchmark 10-year Treasury note held steady at 3.44 percent.
The dollar mostly rose against other major currencies. Gold prices were flat.
Overseas, Japan's Nikkei stock average rose 1.4 percent. Britain's FTSE 100 fell 0.5 percent, Germany's DAX index fell 0.6 percent, and France's CAC-40 lost 0.3 percent.