NEW YORK - Wall Street traded mixed Thursday on new buyout activity and strength in the U.S. service sector, but investors remained jittery about rebounding bond yields.
The Institute for Supply Management's index of service sector activity in June rose to 60.7 from 59.7 in May, indicating that non-manufacturing industries saw slightly faster expansion. The figure was better than expected, fueling the market sentiment that the economy is recovering from a slow first quarter.
However, this week's most important piece of data will be the Labor Department's jobs report Friday, which bond investors are anticipating will show a solid rise in payrolls. That expectation dampened prices of the safe-haven assets, pushing up the 10-year Treasury note's yield back up to 5.10 percent Thursday from 5.04 percent Tuesday - which worried some stock investors about high rates slowing down business.
On Monday, the 10-year yield had slipped below the 5 percent level for the first time since early June, when the benchmark yield surged past 5 percent to a five-year peak of about 5.30 percent.
Also weighing on the Dow Jones industrial average was General Motors Corp., one of blue-chip index's 30 components, which was downgraded by a Bear Stearns analyst after the automaker posted Tuesday afternoon a 21.3 percent drop in June sales compared to last year.
Still, many on Wall Street remained confident about stocks amid takeover news. Hilton Hotels Corp. agreed Tuesday to an all-cash buyout from Blackstone Group in a $20.1 billion deal; chemical company Huntsman Corp. said Wednesday a private-equity firm made a cash buyout offer of about $6 billion that trumps last week's bid from a Dutch company; and a Coca-Cola Co. spokesman said Wednesday the company is looking into buying Cadbury Schweppes PLC's Snapple iced tea brand or building its own tea brand.
In mid-morning trading, the Dow fell 24.71, or 0.18 percent, to 13,552.59.
Broader stock indicators were mixed. The Standard & Poor's 500 index was off 0.44, or 0.03 percent, at 1,524.43, and the Nasdaq composite index rose 1.43, or 0.05 percent, to 2,646.38.
Trading volumes were expected to be low again Thursday, with many traders taking time off after the holiday. That could exacerbate price swings in a nervous market.
The dollar fell against most other major currencies and gold prices rose. The Bank of England raised its benchmark interest rate by 0.25 percent for the fifth time in less than a year to 5.75 percent, as expected, and the European Central Bank indicated it might raise rates later in the year.
Oil prices were headed for another 10-month high. Light sweet crude futures rose 75 cents to $72.16 a barrel on the New York Mercantile Exchange, ahead of the Energy Department's weekly report on U.S. petroleum inventories.
The Russell 2000 index of smaller companies rose 1.93, or 0.23 percent, to 850.02.
Overseas, the often-volatile Shanghai Composite Index plunged 5.3 percent due to worries about government steps to cool down the market and concerns that several new share listings could dampen prices.
Japan's Nikkei stock average rose despite the drop in China's stock market, gaining 0.29 percent. In afternoon trading, Britain's FTSE 100 fell 0.06 percent, Germany's DAX index fell 0.42 percent, and France's CAC-40 fell 0.22 percent.
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