- Turkey says Russian jet shot after violating its airspace
- U.S. economy grew faster last quarter than prior estimate
U.S. stocks erased early losses as investors shook off concerns over the downing of a Russian warplane by Turkish forces, and energy shares rallied for their first back-to-back gains in three weeks.
Commodity companies led a rebound, with raw-materials joining energy to rise the most among the S&P 500’s main groups. Airlines slumped along with travel-related shares after a government warning to American travelers abroad coupled with a jump in crude prices.
The Standard & Poor’s 500 Index rose 0.1 percent to 2,089.14 at 4 p.m. in New York, after earlier falling as much as 0.8 percent. The gauge has gone without two straight winning sessions since Nov. 3. The Dow Jones Industrial Average erased a 109-point slide to rise 19.51 points, or 0.1 percent, to 17,812.19. The Nasdaq Composite Index was little changed. About 6.9 billion shares traded hands on U.S. exchanges, 6.8 percent below the three-month average.
“When you see this type of uncertainty happening, it reinforces looking at the U.S. as a safe haven,” said Tom Anderson, who helps oversee about $8 billion as chief investment officer at Boston Private Wealth. “The U.S. economy is in very solid shape. We’re pretty positive on equities as a result. But there’s certain to be noise and volatility around those events.”
Turkey shot down the Russian warplane near the border with northwestern Syria, drawing an angry rebuke from President Vladimir Putin and marking the first direct clash between foreign powers embroiled in the civil war. He said Russia “won’t tolerate such crimes” but stopped short of threatening any military response against Turkey, which is a member of the North Atlantic Treaty Organization, warning only of “serious consequences” for bilateral ties.
While global financial markets were jolted by concerns that the situation could escalate, political analysts in Russia and Europe said that seemed unlikely given the risks associated with any conflict between Russia and a NATO member. The incident comes with Brussels on the highest-level terror alert and after the U.S. State Department issued a global alert for Americans.
The geopolitical tensions overshadowed data today that showed the economy expanded at a faster pace in the third quarter than previously reported, bolstering the Federal Reserve’s case for raising borrowing costs for the first time since 2006. Traders are now pricing in a 74 percent probability that the Fed will increase interest rates next month.
A separate report showed home prices climbed more than estimated in September compared to a year earlier, signaling residential real estate is sustaining momentum. Another gauge showed consumer confidence unexpectedly fell in November to the lowest since September 2014.
Stocks struggled to add to an advance following the S&P 500’s strongest weekly gain this year, with the gauge little changed from its Friday close. The benchmark is 2 percent away from its May record after rallying 12 percent from a summer swoon and its first correction in four years.
The Chicago Board Options Exchange Volatility Index rose 2 percent Tuesday to 15.93, trimming an earlier 10 percent rise. The measure of market turbulence known as the VIX fell 23 percent last week, the most since July.
Six of the S&P 500’s 10 main industries advanced, with energy and raw-material companies up the most. Financial, utility and industrial companies were the worst performers.
Energy stocks rose for second day, up 2.2 percent on higher oil prices. Marathon Oil Corp. and Chesapeake Energy Corp. added more than 5.5 percent, while Pioneer Natural Resources Co. rose to a five-month high. Exxon Mobil Corp. advanced 2 percent.
Among raw materials, Newmont Mining Corp. gained 2.5 percent as gold rose for the first time in three sessions amid demand for haven assets. Steelmaker Nucor Corp. climbed 3.7 percent after analysts at BB&T Corp. rated the shares a buy. Miner Freeport-McMoRan Inc. added 3.8 percent for its first climb in four sessions as copper rallied.
Analog Devices Inc. rallied 6.4 percent to lead semiconductors in the benchmark index higher after the chipmaker posted better-than-expected earnings. Avago Technologies Ltd. and Skyworks Solutions Inc. gained more than 2.5 percent.
Dollar Tree Inc.’s better-than-expected earnings propelled the shares up 6.6 percent to the highest since 2013. Keurig Green Mountain Inc. and Campbell Soup Co. rose more than 3 percent, though the broader consumer-staples group was little changed. Campbell gained after forecasting full-year profit above analysts’ estimates, even as it trimmed its sales outlook.
A group of homebuilding stocks rose 1.4 percent to the highest level in two months on better-than-expected increases in home prices in September. D.R. Horton Inc., the largest U.S. homebuilder, advanced 1.5 percent to a level last seen in 2006.
Consumer-discretionary stocks fell amid a slump in travel-related companies. Priceline Group Inc., Expedia Inc. and TripAdvisor Inc. retreated more than 1.9 percent, while cruise operators Royal Caribbean Cruises Ltd. and Carnival Corp. also sank at least 1.9 percent.
Similarly, shares of industrial companies were weighed by a selloff in airline operators. The Bloomberg U.S. Airlines Index slumped 2.7 percent, its biggest decline in seven weeks, as United Continental Holdings Inc. and Delta Air Lines Inc. fell at least 3 percent.
Outside of the travel companies among consumer shares, Signet Jewelers Ltd. declined 4.1 percent, the most since February 2014. Its quarterly results missed analysts’ estimates and its outlook fell short of some forecasts.
Three of the Internet’s biggest names -- Google parent Alphabet Inc., Amazon.com Inc. and Facebook Inc. -- fell at least 0.9 percent. Those shares, along with Priceline and a 1.4 percent drop in Netflix Inc., dragged the Nasdaq Internet Index down 0.9 percent after it closed yesterday at a record.
Financial shares fell for a second day, with real-estate companies among the worst performers in the group. Mall owner Simon Property Group Inc. lost 2 percent. SL Green Realty Corp. and AvalonBay Communities Inc. slipped more than 1.1 percent.
The earnings season is drawing to a close, with almost all members of the gauge having reported. Of those, 74 percent beat profit estimates, while only 44 percent exceeded sales forecasts. Analysts project profits for index members fell 3.8 percent in the third quarter, compared with expectations for a 7.2 percent drop at the start of the season.