Stocks end flat amid hope for Fed help

By NBC News wire reports

Updated at 4:00 p.m. ET: Stocks closed Wednesday flat, as there were few signals to push shares in either direction one day after the benchmark S&P 500 closed above 1,400 for the first time in more than three months.

Expectations for action from the European Central Bank and Federal Reserve triggered a recent rally in equities, with the S&P 500 up for five consecutive weeks. Economic data still points to lackluster demand worldwide, and European central banks are projecting poor growth for coming quarters.

"The question is, do people place their bets in favor of a recovery moving forward in hopes that the fairly weak but definitely more positive jobs numbers of last week are really meaningful? Or are you going to say, are we overvalued here in terms of the fundamentals?" said Doreen Mogavero, CEO of Mogavero, Lee & Co in New York.

"I think it's a question that remains unanswered, and people are going to remain cautious because Europe is not doing very well. We know the ECB is ready to act but quite frankly, they have not, so people are sitting and waiting for someone to make the first move."

The Bank of England gave little indication that it would rush to pour in further stimulus even as it sharply cut its forecast for medium-term economic growth in Britain. France's central bank forecast a contraction in growth going into the third quarter, citing weak demand from the periphery and Britain.

Spanish benchmark 10-year yields briefly rose above 7 percent, underscoring the cautious tone from investors recently disappointed by lack of coordination from European officials in their efforts to reignite the economy.

Markets are pricing in the idea that it may take time until Spain asks for a bailout, which would open the door for ECB intervention.

Wednesday's market moves appeared to be largely driven by program, or algorithmic, trading, signaling a lack of conviction in any one direction.

"Volumes are thin and mostly trading on odd lots, which would indicate that a lot of this is set and forget program flow," said Joseph Greco, managing director at Meridian Equity Partners in New York.

"We're not seeing 10,000-share or 25,000-share orders, where someone's taking a position with conviction."

The consumer discretionary sector fell as fashion juggernaut Ralph Lauren and travel websites Priceline and Orbitz both forecast slowing demand due to the global slowdown.

Shares of Dean Foods , which is spinning off a unit, jumped a day after the U.S. dairy company posted a stronger-than-expected quarterly profit.

Reuters contributed to this report.

Source: http://marketday.nbcnews.com/_news/2012/08/08/13180721-stocks-slip-following-three-days-of-gains?lite

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