Dow Approaches 13,000
The broader stock market edged slightly lower Tuesday on weak reports on housing and consumer confidence, while the Dow Jones Industrial average came within 11 points of the 13,000 mark. IBM (IBM) led the Dow higher on news that it will boost its quarterly dividend and buyback program. Some earnings reports, especially the better-than-expected results and outlook from chipmaker Texas Instruments (TXN), also supported the market.
The Dow Jones industrial average rose 34.54 points, or 0.27%, to 12,953.94, after touching a new high during trading of 12,989.86. The broader Standard & Poor's 500 index lost 0.52 point, or 0.04%, to 1,480.41. The tech-heavy Nasdaq composite edged up 0.87 points, or 0.03%, to 2,524.54.
Some negative signals for housing were released on Tuesday. The S&P Case-Shiller home price index fell 0.47% in February to 201.2, vs. 202.2 in January -- the seventh straight monthly decline. On a year-over-year basis, the price index fell 1%. "The decline in price is symptomatic of the continuing correction in the market from the oversupply in housing," says Action Economics.
U.S. existing home sales dropped to a 6.12 million rate in March -- weaker than expected -- from the 6.68 million rate of February, while the $217,000 median price for March was modestly stronger than expected, says Action Economics.
In other economic news, the Conference Board's April consumer confidence index fell to 104, weaker than the 105.0 forecast.
Coming Wednesday is March durable goods orders, which is expected to rise 2.2%, while shipments increase 1.0%. Inventories are expected to be flat. Civilian aircraft is expected to provide a big boost to orders and shipments, given data from Boeing, says Action Economics.
Among stocks on the move Tuesday, IBM (IBM) shares jumped 3.5% after the company announced it will raise its quarterly dividend by a third and its share buyback program by $15 billion.
In earnings news, gains were reported by DuPont (DD), AT&T (T), and Lockheed Martin (LMT).
Whirlpool (WHR) shot up after it reported a 24% sales rise for the first quarter and confirmed its guidance for the year.
Toyota (TM) said it sold 2.35 million vehicles worldwide in the first quarter, surpassing the 2.26 million vehicles General Motors (GM) said it sold in the period.
One of the big losers was Lexmark International (LXK) after it posted a rise in EPS on a 1.2% revenue drop. It noted that original equipment manufacturing unit sales continued to be weak, and it had declines in inkjet supplies sales and hardware pricing.
Target (TGT) says it sees April same-store sales weaker than initial plan of down 2%-4%. It cut 4%-6% March-April same-store sales growth forecast to 3%-4%; and it sees first-quarter same-store sales up 4%. It still sees first-quarter EPS growth consistent with its previous fiscal year 2008 estimate.
In the energy markets, June NYMEX crude oil fell $1.32 to $64.57 amid heavy profit taking, largely from hedge funds, says Action Economics. Wednesday's weekly EIA inventory data is expected to show a 500,000 barrel draw in crude stocks, a 500,000 rise in distillate supplies, and a 300,000 barrel draw in gasoline, says Action Economics.
European stock markets finished lower Tuesday. In London, the FTSE-100 index fell 0.8% to 6,429.5. Germany's DAX index was down 0.9% to 7,270.32. In Paris, the CAC 40 index lost 0.5% to 5,886.03.
China's market posted gains. The Shanghai Composite Index added 0.3% to 3,720.53, while the CSI 300 index edged up 0.4% to 3,445.2. In Hong Kong, the Hang Seng index rose 0.08% to 20,572.8. And in Japan, the Nikkei 225 index edged down 0.02% to 17,451.77.
A weak round of housing and consumer confidence data set the stage for a modest bounce in Treasuries, says Action Economics. "The data appeared to validate the market's long-held suspicion that the contraction in the housing sector is spilling over into weaker consumption and inhibiting economic growth," says Action Economics. The 10-year yield fell to 4.62%.