Stocks Finish Mixed
U.S. stock indexes closed mixed Tuesday in a seesaw session. One one side: Investors taking profits after six sessions of gains in the S&P 500. On the other: Bargain hunters sniffing opportunities among the blue chips. The Dow industrials outpaced other key indexes, aided by gains in American Express (AXP), Disney (DIS), Chevron (CVX), IBM (IBM), and 3M (MMM).
On Tuesday, the 30-stock Dow Jones industrial average finsihed higher by 20.03 points, or 0.20%, at 10,246.97. The broad Standard & Poor's 500-stock index was down 0.07 points, or 0.01%, to 1,093.01. The tech-heavy Nasdaq composite index lost 2.98 points, or 0.14%, to 2,151.08.
On the New York Stock Exchange, 17 stocks were lower in price for every 13 that advanced. Breadth on the Nasdaq was 18-9 negative. Trading was slow ahead of Wednesday's Veterans Day semi-holiday.
Treasuries were mixed after Tuesday's $30 billion 10-year note refunding auction.
The dollar index finished higher; recent weakness has sparked some carry trade activity involving the greenback.
Gold futures were up 10 cents to $1,101.50 Tuesday afternoon in a volatile session following Monday's surge to record heights.
December crude oil futures were off $1.35 to $78.08 per barrel on profit taking from yesterday's surge on G20 finance ministers' pledge to maintain economic stimulus, according to S&P MarketScope. Some profit taking was triggered by news Hurricane Ida was downgraded to a tropical depression as it hit land a bit east of major oil and natural gas fields, says S&P MarketScope. Nevertheless, the storm forced the closure of some operations in the Gulf of Mexico. Also, the IEA lowered its long-term oil demand forecast.
European stock indexes finished mixed Tuesday. Benchmark indexes were lower by 0.09% in London, unchanged in Paris, and down 0.12% in Frankfurt.
Asian equities ended higher. Tokyo stocks rose 0.63%, Hong Kong advanced 0.27%, and Shanghai gained 0.10%.
There were no significant U.S. economic reports released Tuesday.
Earnings results were mixed after the close of trading Monday, with video game-maker Electronic Arts (ERTS) announcing a wider than expected quarterly loss and a cut of 17% of its workforce.
Priceline.com (PCLN) profits surged on increased travel summer travel reservations.
Beazer Homes (BZH) surged over 9% in premarket trading Tuesday after reporting a profit for its fiscal fourth quarter.
In Europe, HSBC (HBC) reported a third-quarter profit and lower consumer loan losses, while Barclays' (BCS) profits declined 54%. Embattled bank Lloyd's (LYG) plans to cut 5,000 workers.
The European Commission opened an antitrust investigation into news and financial-data company Thomson Reuters (TRI) on suspicion that the company abuses its dominant market position in real-time market data feed services. Sen. Christopher Dodd will propose creating a single U.S. regulator that would strip the Federal Reserve and Federal Deposit Insurance Corp. of bank- supervision authority, according to sources. Dodd, chairman of the Senate Banking Committee, would eliminate the Office of the Comptroller of the Currency and the Office of Thrift Supervision and fold the Treasury Department units into the new bank regulator. The Connecticut Democrat is scheduled to release a draft of his financial-regulation overhaul plan Tuesday in Washington.
San Francisco Federal Reserve President Janet Yellen questioned the strength and durability of the recovery of the U.S. economy, with many banks still "hobbled" by bad loans despite a massive effort by governments and central banks to stem the downturn. "Some of the rebound is due to temporary government programs and a swing in inventory investment that will not provide an ongoing source of growth," she said in a speech Tuesday. She sees the housing market as stabilizing, though foreclosures could put renewed downward pressure on home prices, while labor market weakness could keep the recovery "sluggish."
Boston Fed President Eric Rosengren discussed large banks and systemic risk in London Tuesday, urging policy-makers to shore up regulations for when banks become too large relative to their home markets, noting they may export a credit crunch to their host countries. He sees some benefit from separating the capitalization of global banks domestic operations from those of their global operations, along with "living wills" for banks, more capital and larger reserves to reduce systemic risk.
Federal Reserve Gov. Daniel Tarullo said proposals to separate trading from deposit taking and lending at the biggest banks probably wouldn't dispel the perception that some firms are too big to fail. "Some very large institutions have in the past encountered serious difficulties through risky lending alone," the central bank governor said in remarks Monday to the Money Marketeers of New York University. Tarullo cited "massive failures" in risk management inside financial firms, and "serious deficiencies" in government regulation as causes of the crisis.
Fitch Ratings said the U.K. government is potentially most at risk of losing its triple-A rating, but its stable outlook reflects an expectation that it will announce moves to cut its debt more aggressively after an election that must be held by June of next year. The co-head of Fitch's sovereign ratings said that among large developed economies with a top credit rating, the U.K. was "potentially most at risk" of a downgrade "given that if faced the largest budget adjustment." However, David Riley later said the stable rating outlook Fitch assigns to the U.K. "reflected our expectation that the U.K. government will articulate a stronger fiscal consolidation program next year." Despite the warning, U.K. Trade Minister Mervyn Davies insisted that the government's credit rating is "absolutely" safe.
In economic news Tuesday, the International Council of Shopping Centers (ICSC) and Goldman Sachs U.S. chain store sales index fell 0.1% in the week ended Nov. 7 after rising 0.1% the previous week. It was the first pullback in 7 weeks. As for sales on a year-over-year basis, sales rose by 2.9% after rising 1.9% the week before as easier sales comparisons aided in the increase.
The German Nov. ZEW investor confidence index fell to 51.1 from 56.0, but current conditions improved to -65.6 from -72.2.
The U.K. visible trade deficit widened to £7.19 billion in September from £6.07 billion in August, which was revised from £6.24 billion. Exports increased by 3.9%, but imports rose by 7.5%.