Stocks Finish Mixed
Major U.S. stock indexes finished mixed Tuesday, paring early losses, as some traders bet on more rate cuts following a fresh batch of weak economic data.
On Tuesday, the Dow Jones industrial average was up 19.59 points, or 0.14%, to 13,778.65. The broader S&P 500 index declined 0.52 point, or 0.03%, to 1,517.21. The tech-heavy Nasdaq composite index added 15.5 points, or 0.58%, to 2,683.45. The Nasdaq index was bolstered by strength in tech stalwarts Apple (AAPL), Cisco (CSCO), and Microsoft (MSFT).
While major indexes were mostly positive Tuesday, the broader market was weak. On the NYSE, 19 stocks fell in price for each 13 that rose. Nasdaq breadth was 17-13 negative.
Investors were disturbed by poor results from homebuilder Lennar (LEN) and warnings from retail giants Target (TGT) and Lowe's (LOW).
Reports on the housing sector and the consumer occupied the market's attention Tuesday. Lennar, the largest U.S. homebuilder, lost more money last quarter than any quarter in its history. Lennar reported a $3.25 per share loss in the third quarter, vs. earnings of $1.30 a year ago as total revenue dropped 44%. The homebuilder saw its selling price fall 6%, and home deliveries were down 41%.
Meanwhile, the U.S. S&P Case/Shiller home price index dropped 0.45% in July. The 20-city index is off 3.9% from this time last year.
Another big worry on Wall Street is the strength of the consumer. The Conference Board's U.S. consumer confidence index plummeted to 99.8 in September from 105.6 in August. The headline reading was below the 104.8 that markets expected and at a low not seen since November 2005. The present situations component plunged to 121.7 from 130.1, while expectations index fell to 85.2 from 89.2. The labor index, jobs plentiful minus jobs hard to get, fell to 3.6 from 7.8, adding to concerns over next week's payrolls report.
The U.S. ICSC UBS chain store sales index fell 1% in the week ended Sept. 22. That follows a 1.1% decline the previous week, the largest back-to-back declines since December, 2006, Action Economics notes.
Two retailers offered some downbeat news. Lowe's, citing weaker than expected sales, expects earnings in fiscal 2008 to be at the low end or slightly below previous expectations.
Target expects same-store sales to grow 1.5% to 2.5% in September, below previous forecasts because of weak sales in Florida and the Northeast.
Oil prices fell sharply Tuesday. November crude oil fell $1.42 in New York trading to $79.53 per barrel amid signs OPEC production is increasing and this week's inventory report isn't likely to show much slowdown in output.
Among other stocks in the news Tuesday, General Motors (GM) is facing the prospect of an expensive strike after workers represented by the United Auto Workers walked off the job Monday.
Microsoft (MSFT), which on Tuesday released its much-anticipated Halo 3 video game, may purchase a minority stake in Facebook, the Wall Street Journal reports.
European indexes moved lower on Tuesday. In London, the FTSE 100 index was off 1.07% to 6,396.9. Germany's DAX index fell 0.24% to 7,769.44. In Paris, the CAC 40 index moved 0.89% lower to 5,641.59.
Asian markets were mixed. Japan's Nikkei index was up 0.55% to 16,401.73. In Hong Kong, the Hang Seng index fell 0.46% to 26,430.29. The Shanghai composite index was off 1.08% to 5,425.88.
Treasuries erased early gains Tuesday to close down slightly, as a recovery in equities calmed nerves and overshadowed weak consumer confidence and housing data. The 10-year note fell 03/32 in price to 100-01/32 for a yield of 4.62%. The 30-year bond slipped 02/32 to 101-20/32 for a yield of 4.90%. On Wednesday, the market will turn its attention to reports on August durable goods orders, weekly energy inventory data, a speech from European Central Bank President Trichet, and a two-year note auction.