Stocks, Bonds Move Little

U.S. stock and bond markets stalled Monday, taking a breather after blue-chip share indexes reached five-year highs Friday.

Many traders were waiting on a monetary policy speech that Federal Reserve Chairman Ben S. Bernanke was to deliver later in the day. In his comments, Bernanke sounded relatively upbeat on the economy.

In other markets, Mexico’s main stock index hit a record high, while Japan’s Nikkei 225 index neared a fresh five-year high.

On Wall Street, major indexes mostly ended little changed. The Dow Jones industrial average slipped 5.12 points, or less than 0.1%, to 11,274.53.

The Standard & Poor’s 500 was off 2.17 points, or 0.2%, to 1,305.08. The Nasdaq composite rose 7.63 points, or 0.3%, to 2,314.11.

Losers topped winners by about 5 to 4 on the New York Stock Exchange.

In the bond market, Treasury yields barely budged. The 10-year T-note yield ended at 4.66%, down from 4.67% on Friday.

Wall Street was hoping that Bernanke would provide more guidance on the central bank’s credit-tightening plans, said Graig Fantuzzi, a debt strategist at Morgan Stanley in New York.

In his speech Monday evening in New York, the Fed chief downplayed the idea that the recent “flattening” of Treasury bond yields was a sign that the economy was slowing significantly.

For much of this year, the 10-year T-note yield has been below the two-year T-note yield. The latter was 4.65% on Monday.

Historically, when long-term interest rates have fallen below short-term rates, it often has been a warning sign that a recession was on the horizon.

But Bernanke said he “would not interpret the currently very flat yield curve as indicating a significant economic slowdown.” He said other factors, such as high demand for bonds from Asian investors, could be depressing long-term yields.

What’s more, “the yield curve is only one of the financial indicators that researchers have found useful in predicting swings in economic activity,” Bernanke said, adding that other key indicators “would seem to be consistent with continuing solid economic growth.”

Wall Street has been expecting the Fed to raise its key short-term rate from the current 4.5% to 4.75% when policymakers meet March 28 and to 5% at their May 10 meeting. Bernanke’s speech may reinforce those expectations.

Long-term bond yields have risen this year amid signs of resilience in the economy, although yields pulled back last week.

The stock market has gotten a boost from optimism about the economy. The Dow on Friday reached its highest level since May 2001, and some broader indexes hit record highs.

Among Monday’s highlights:

* Wal-Mart Stores shares supported the Dow. The stock rose $1.07 to $47.76 after the company said it planned a major expansion in China.

Also in the retail sector, Michaels Stores soared $4.39 to $38.35 after the arts and crafts retail chain put itself up for sale.

* U.S.-traded shares of Chinese Internet-related companies helped lift Nasdaq. NetEase.com jumped $6.18 to $96.18 after announcing a 4-for-1 stock split. Sohu.com rose $1.04 to $23.93.

* Energy-related stocks were mostly lower as near-term crude futures slid $2.35 to $60.42 a barrel in New York. Transocean dropped $2.29 to $77.80, Encana lost $2.09 to $45.85 and Sunoco slumped $4.24 to $75.37.

* Shares of home builders pulled back after rebounding in recent sessions. KB Home fell $1.77 to $65.51. It is down 20% from its January high of $81.66. Lennar slid $1.16 to $58.85.

* Real estate investment trust shares were mostly lower after an index of 155 shares in the sector hit a record high Friday. REITs, which typically own commercial properties, have fared much better than home builders’ stocks this year.

Vornado Realty dropped $1.46 to $97 but is up 16% year to date. Public Storage fell 84 cents to $81.61 and SL Green Realty dropped $3.80 to $99.29.

* Utility stocks, which have struggled as bond yields have risen since January, were weak. TXU slumped $1.11 to $48.43 and Dominion Resources fell $1.20 to $72.05. The Dow utility stock index lost 1.2%. It is down 0.4% year to date. By contrast, the Dow industrials are up 5.2%.

* Mexico’s IPC stock index rose 1.2% to a record 19,581.12 and is up 10% year to date. The market has regained its momentum in recent sessions after struggling for most of February.

Japanese stocks also have recovered in recent days from a February slide.

The Nikkei index rose 1.7% to 16,624.80. It hit a five-year high of 16,747 on Feb. 6.