Despite weakness earlier in the session, the major indexes clawed their way back to finish with modest gains Tuesday. reversal. Stocks were aided by a big turnaround in the bond market, as Treasuries finished strong after early losses, according to S&P MarketScope.
On Tuesday, the Dow Jones industrial average finished up 22.81 points, after being down more than 70 points earlier, to 9,340.45. The broader Standard & Poor's 500 index increased 3.02 points, or 0.30%, to 996.73. The tech-heavy Nasdaq composite index inched up 6.33 points, or 0.36%, at 1,770.64. Trading was thin Tuesday, and volume should remain light for the remainder of the week ahead of the Labor Day weekend.
It seemed investors didn't know what to make of the latest economic updates on durable goods, consumer confidence and new home sales. Durable goods orders in July rose 1.0% in July from an upwardly revised 2.6% in June. Excluding transportation, orders gained 1.7% and excluding defense orders rose 1.4%. Overall the data are in line with median forecasts, says economic research group MMS International.
The Conference Board's consumer confidence index rose to 81.3 in August from July's level of 77. Consumers' take on the present economic situation declined, but expectations rose. The "jobs hard to get" subcomponent rose to 34.1% from 32.7%, which is the highest level since January 1994.
"While economic activity is clearly on the upswing, concerns remain over a lingering jobless recovery. These data do not help those concerns," says MMS. The weakness also suggests risk of another soft employment report on Sept. 5.
In other data, new home sales fell 2.9% in July to a 1.16 million-unit annual pace from an upwardly revised 1.20 million-unit rate in June. The drop was worse than expected, notes MMS, but the upward revision to June new home sales leaves the pace of sales in July at the second fastest on record.
No major economic data are due Wednesday.
H&R Block (HRB) and Dollar Tree Stores (DLTR) will report earnings after the market close Tuesday.
On Wednesday, investors gets earnings updates from retailers Chico's FAS (CHS) and Michaels Stores (MIK) and chipmaker LTX Corp. (LTXX)
In commodities Tuesday, gasoline futures, which have surged in recent sessions on lower inventories and higher demand, were down after the New York Mercantile Exchange raised margin requirements to cool off some of the speculation in the contract. The selloff was small, however, considering the gains gasoline futures have made.
Treasuries finished finished handily in the green in the face of another strong series of U.S. data. Curious rumors about Fed Chairman Greenspan's premature demise along with equity and dollar weakness helped Treasuries recover from earlier losses.
European bourses ended lower. London's Financial Times-Stock Exchange 100 index finished down 48.50 points, or 1.15%, at 4,177.40, following lackluster performance in the U.S. In Paris, the CAC 40 lost 34.67 points, or 1.05% at 3,256.69. Germany's DAX index was down 56.90 points, or 1.63% at 3,443.19, despite the Ifo Business Confidence index rising to a 14-month high.
Asian markets finished mixed. Japan's Nikkei 225 index added 55.93 points, or 0.54%, to finish at 10,332.57. The market was trading weaker in the morning, due to continuous profit taking in banks, construction, and brokerage firms. Selling by corporate pension funds, those planning to return the substitute investment portion to the government as early as September, were also reported. However, the market started to recover in the afternoon.
In Hong Kong, the Hang Seng index shed 10.29 points, or 0.10%, to close at 10,753.93.