Markets End Flat, Awaiting Election Results
Stocks meandered in light trading and then closed little changed Tuesday as investors held their bets to await direction from a cliffhanger presidential election.
Blue chips fluctuated in and out of positive territory as financial, defense and health-care stocks gave back some of their gains from Monday. Technology stocks were volatile for a second day, pulled lower by concerns related to Cisco Systems.
The Dow Jones industrial average closed down 25.03 points, or 0.2%, at 10,952.18 after hovering in a 70-point range for much of the day.
Broader stock indicators barely moved. The Nasdaq composite index ended the day virtually unchanged, off 0.42 point, or less than 0.1%, at 3,415.79, trading within a 70-point span.
The Standard & Poor’s 500 index also held steady, off 0.32 point, or less than 0.1%, at 1,431.87.
“People are being quiet today because of the election. They’re not willing to make any significant bets until that’s out of the way,” said Bob Streed, senior vice president at Northern Trust. “I would think that the market will rally when the election is over simply because the uncertainty is out of the way.”
Cisco rose $1.63 to $56.75 after reporting quarterly earnings late Monday that were slightly ahead of Wall Street estimates.
But investors were concerned that the networking company’s raw material inventory was so large that it would reduce orders to its suppliers, particularly chip makers, and that sector tumbled Tuesday.
Not all chip stocks were punished. Santa Clara, Calif.-based Transmeta, which is viewed as a rival to Intel, more than doubled in its market debut Tuesday, opening at $44.88 after being priced at $21. The stock closed at $45.25.
Pharmaceutical, defense and energy-related stocks surged Monday, but some of those stocks slipped Tuesday.
Drug maker Merck fell $3.13 to $86.88. Banker J.P. Morgan was off $3.25 at $163.06. Defense contractor Lockheed Martin was down 14 cents at $33.37. The Dow was also hurt by General Motors, which fell $3.94 to $57 on a ratings downgrade.
Advancing issues outnumbered decliners by a 12-11 ratio amid light volume on the New York Stock Exchange. Consolidated volume came to 1.06 billion shares, compared with 1.13 billion Monday. About 20 stocks fell for every 18 that rose on Nasdaq, where volume was a desultory 1.7 billion.
On the bond market, Treasury yields inched up as investors predicted the country’s new administration may reduce the government’s budget surplus by either enacting tax cuts or spending programs.
“It’s the end of the Clinton era” during which the government under President Clinton retired about $450 billion of outstanding debt, and that “has benefited Treasuries,” said Tony Crescenzi, the chief bond strategist at Miller Tabak & Co.
Treasury yields rose as the government sold $12 billion of five-year notes at a yield of 5.87%, above expectations, and traders prepared for the sale of $8 billion in 10-year notes today. Demand was light.
Crude oil for December delivery rose 54 cents, or 1.6%, to $33.40 a barrel in New York as hopes that low U.S. inventories would begin to increase were dimmed by a slowdown in exports from Nigeria.
While the Organization of Petroleum Exporting Countries boosted output four times this year--most recently last week--shipments from Nigeria may fall because some local residents have tapped into export pipelines.
Energy stocks remained strong on the rise in crude prices. ExxonMobil was up $1.02 to $89.52.
Market Roundup, C9-10
