Financial Watch

A U.S. stock rally evaporated abruptly yesterday as a strengthening dollar sapped gains in commodities and related shares, largely overtaking bullish sentiment that came with upbeat results in retail and technology sectors.

“The volume is light enough that swings can be pretty dramatic even in the last half hour, where we saw the dumping of lots of energy and material names,” said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank.

Far off a near 120-point rise, the Dow Jones industrial average ended at 10,841.21, up 5.06 points, or less than 0.1 percent, with 16 of its 30 components ending higher, led by Walt Disney Co., up 2 percent. Chemical Du Pont fronted the losses among the blue chips, off 2.4 percent.

The S&P 500 Index fell 1.99 points, or 0.2 percent, to 1,165.73. Materials and energy were the greatest laggards on the index, often used as an indicator of the broader market.

The Nasdaq Composite Index declined 1.35 points, or 0.1 percent, to 2,397.41.
An improved outlook from wireless-chip manufacturer Qualcomm bolstered the technology sector, while robust results from electronics retailer Best Buy helped boost consumer discretionary issues.

Decliners overcame advancers by a 3-to-2 margin on the New York Stock Exchange, where composite volume topped 5.8 billion.

In testimony before the House Financial Services Committee, Federal Reserve Chairman Ben Bernanke said the U.S. economy remains so fragile that extraordinarily low interest rates will be needed for an extended time.

Ahead of Wall Street’s open, the Labor Department reported first-time jobless claims last week fell to 442,000, the fourth straight weekly decline. The data gave credence to thinking that job losses are lessening and that the economy could show actual job growth in March.

The climb in equities comes after Wednesday’s stall in the market’s recent upward trajectory, with the major indexes all poised for weekly gains.