Stocks closed at the days highs, tacking on modest gains as investors searched for a clear market direction after a package of mixed economic data and Japan’s strongest attempt in years to tame its soaring yen.
The Dow Jones Industrial Average added 46.24 points, or 0.44%, at 10572.73, helped by a 2.9% climb at Travelers and a 1.7% gain at Kraft Foods. Pfizer also rose 1.1% as health-care stocks led the broader market.
The Nasdaq Composite advanced 0.50% to 2301.32, while the Standard & Poor’s 500-stock index edged up 0.35% to 1125.07.
Traders said that the recent rise in investor optimism has helped push the market up to the top of its tight trading range. One key signal will be whether the S&P 500 can break through the 1130 level.
“There’s a lot of uncertainty in the U.S. in terms of what direction where we’re heading in,” said John M. Burns, portfolio manager at Bingham, Osborn & Scarborough LLC. “I can’t remember a time in my experience when you have this many people on opposite sides of the debate, whether we dip or climb.”
Trading volumes remained low, with about 3.5 billion shares changing hands in New York Stock Exchange Composite volume, far below the year’s average of five billion shares.
Jim Peters, chief executive officer of Birmingham, Mich.-based Tactical Allocation Group, said he saw few reasons for cheer, given what he called a questionable recovery.
“We don’t see the evidence for growth,” Mr. Peters said. “I don’t know how we can expect the kind of [corporate] revenue gains that analysts are expecting given the shape of the macroeconomy.”
Keeping the market trapped in a narrow band, investors mulled over a wave of foreign-exchange intervention by Japan totaling about $16 billion to stop the climbing yen that threatens to cripple its economy. The move, which sent the dollar higher against the yen, marked the first time Japanese authorities publicly intervened in currency markets since 2004.
Analysts were generally skeptical about whether the intervention would have any lasting effects.
“History is full of many failed interventions and we’re not convinced from a global macro standpoint this is particularly material,” said Douglas Kreps, managing director at Fort Pitt Capital Group. “Japan is clearly fighting the effects of the yen … but given the levels of currency trading world-wide, it’s pretty difficult to have a government have a meaningful impact beyond short-term impact.”
The dollar rose more than 3% to trade above 85 yen following the intervention, and was recently fetching 85.58 yen. The U.S. Dollar Index, tracking the U.S. currency against a basket of six others, rose 0.4%.
Japan’s Nikkei Stock Average surged after the intervention, closing up 2.3%, its largest one-day gain since late July. Most major European indexes were lower, weighed down by weak U.K. employment data.
Treasurys edged higher, pushing the yield on the 10-year note down to 2.72%. Crude-oil prices slipped below $77 a barrel.
Among U.S. data, a Federal Reserve report on New York-area manufacturing showed a slower pace of expansion than in August, while expectations about economic activity in the New York region continued to deteriorate.
Separate data showed U.S. industrial production rose for a second straight month in August, but the increase was smaller than expected. Meanwhile, U.S. import prices rose more than expected in August from July.
“We’re getting a mixed bag of data domestically, which shows things are maybe not rolling over, but are slowing down,” Mr. Mills said.