Quieter Day as Wall St. Waits

U.S. stocks were little changed Tuesday as government reports painted a mixed picture of the economy.

In other trading, gold, copper and other metals rebounded after diving Monday. Overseas, many emerging markets stabilized after two days of heavy profit taking.

The Labor Department said its producer price index for April jumped 0.9%, but, excluding food and energy costs, the core index was up a tame 0.1%.

A report showing a drop in new-home construction in April fed hopes that economic growth was tapering, which could bring an end to the Federal Reserve’s campaign to boost interest rates and contain inflation.

But a strong reading on April industrial activity kept investors on edge about the Fed.

“When you add up all the numbers, the economy is doing well, but there’s still a hint of inflation around,” said Larry Wachtel, an analyst at Wachovia Securities.

The mixed economic numbers countered some excitement over solid earnings from Wal-Mart Stores and a drop in Treasury bond yields. Investors were looking ahead to today’s report on April consumer prices for more clarity about the inflation picture.

At the close of trading, the Dow Jones industrial average was down 8.88 points, or 0.1%, to 11,419.89.

Broader stock indicators also were modestly lower. The Standard & Poor’s 500 index dropped 2.42 points, or 0.2%, to 1,292.08, and the Nasdaq composite fell 9.39 points, or 0.4%, to 2,229.13, its sixth straight decline.

The Russell 2,000 index of smaller stocks eased 0.17 point, or 0.02%, to 737.46, its seventh straight drop.

But winners narrowly outnumbered losers on the New York Stock Exchange and on Nasdaq, a sign that the market may be finding its legs after sinking late last week on inflation and interest rate worries, some analysts said.

Treasury bond yields fell on the drop in housing starts, as some traders bet that a weaker housing sector would lower the odds that the Fed would raise its key short-term rate target for a 17th straight time next month.

The yield on the benchmark 10-year Treasury note fell to 5.10% from 5.16% on Monday.

Gold prices bounced back after diving $26.70 an ounce Monday, when some investors cashed out of the metal’s stunning recent rise. On Tuesday near-term futures in New York gained $7.90 to $691.50 an ounce.

Copper futures rebounded 11.3 cents to $3.98 a pound.

Metals prices were helped in part by a renewed slide in the dollar, which makes dollar-denominated commodities cheaper for foreign buyers. The greenback fell to 109.72 yen from 110.20 on Monday. The euro rose to $1.285 from $1.281.

Crude oil futures inched upward after two days of selling and as the market awaited the government’s weekly inventory update today. A barrel of light crude rose 12 cents to settle at $69.53 in New York.

Wall Street is always sensitive to economic data, but investors have been particularly anxious since the Fed said last week that it might continue to tighten credit if inflation pressures warrant higher interest rates.

In other market highlights:

* Wal-Mart rose 64 cents to $48.07 on its quarterly earnings report. But Home Depot slid $2.05 to $38.45. The retailer said profit climbed 19% in the first quarter, but its sales came in shy of estimates. Home Depot’s decline weighed on the Dow index.

* Deere climbed $1.79 to $89.31 after saying its earnings jumped 23% last quarter, boosted by a modest lift in sales of its tractors and farm equipment.

* Home builders’ shares fell on the decline in housing starts. KB Home declined 59 cents to $55.95 and is down 23% year to date. Pulte Homes lost 78 cents to $32.66 and Ryland dropped 97 cents to $55.85.

* Among emerging markets, Mexico’s main stock index rose 0.6% after falling 2% on Monday. India’s Sensex index was up 0.4% after losing 3.8% on Monday. Russia’s RTS index eased 0.3% after tumbling 5.4% on Monday.

European markets were modestly higher, but Japan’s Nikkei 225 index dropped 2% to 16,158, its sixth straight decline.