Stocks finished mixed Tuesday after a strong start, as futures-related selling took hold late in the session. The pullback coincided with a brief bounce in oil futures and comments by Atlanta Fed President Guynn that Fed policy is not yet at a neutral level, according to Standard & Poor's MarketScope.
On Tuesday, the Dow Jones industrial average rose 16.04 points, or 0.15%, to 10,483.07. The broader Standard & Poor's 500 index fell 0.24 points, or 0.02%, to 1,197.27. The tech-heavy Nasdaq composite index declined 8.60 points, or 0.41%, to 2,067.16.
Early strength in stocks Tuesday was sparked by comments from Federal Reserve Chairman Alan Greenspan. Speaking before the International Monetary Fund Monday night, Greenspan didn't give any solid hints to the direction the Federal Open Market Committee might take at its June meeting. But he did say that he believed that lower long-term interest rates don't automatically signal an economic slowdown. He also added that it appeared "new forces" in international markets are likely to be driving the unusually low global rates.
In economic news, U.S. consumer credit rose for April rose $1.3 billion, or 0.7%, which was lower than expected. This follows a revised 6.9% increase in March.
In the energy markets, July crude oil futures settled down 73 cents Tuesday, to $53.58 a barrel. Much of the drop was a result of profit-taking ahead of Wednesday's weekly inventory data, says Action Economics.
In corporate news, shares of General Motors (GM) moved higher after CEO Rick Wagoner announced at the company's annual shareholder meeting that it plans to lay off at least 25,000 U.S. workers by 2008, in addition to closing assembly and component plants.
Sears Holdings (SHLD) posted a loss of seven cents in the first quarter, vs. earnings of 94 cents per share last quarter. The company said that higher expenses were to blame, and that a change in an accounting principle offset a 65% revenue rise.
Digital spoken-word audio provider Audible (ADBL) inked a deal with XM Satellite Radio (XMSR) to introduce handheld devices that would play both satellite and .mp3 content from the two providers. The plan would also make XM Satellite Radio's content available for download on the Audible website.
Pharmaceutical Celgene (CELG) said the FDA has formally accepted for review its new drug, Revlimid, which treats patients with chromosal abnormalities.
Treasury prices finished higher following Greenspan's dovish comments Monday night to the International Monetary Fund. A weaker-than-expected consumer credit report did little to halt the gains for longer-dated Treasuries, as rounds of short-covering drove the long yields even lower, says Action Economics. The yield on the 10-year Treasury note finished at 3.90%.
European stock markets closed higher Tuesday, as Brent crude oil futures fell. London's FTSE 100 index rose 44.80 points, or 0.90%, to 5,025.20. The BRC retail sales index fell by 2.4% year-on-year in May, after 4.7% decline in April. Diageo (DEO) stock went up after the company agreed to buy the Bushmills whiskey brand. Shire Pharmaceuticals (SHPGY) also was up after Smith Barney initiated coverage of the stock with a "buy" rating.
Germany's DAX index went up 68.75 points, or 1.53%, to 4,566.01, as Germman industrial production rose by 1.1%, beating expectations. Bund yields were down to 3.17%.
In Paris, the CAC 40 index, gained 34.27 points, or 0.83%, moving to 4,180.74.
Asian markets closed lower Tuesday. In Japan, the Nikkei 225 index fell53.17 points, or 0.47%, to 11,217.45.
In Hong Kong, the Hang Seng index lost 23.26 points, or 0.17%, to 13,837.29.