Market Ends Mixed; Dow Falls
Stocks ended mixed Tuesday, with a sharp decline in General Motors dragging down the Dow Jones industrial average while smaller stocks stabilized after sliding Monday.
GM fell $1.20 to $19.85, its lowest closing level since 1982, in part on growing concern that it may be displaced as the world’s largest automaker by Toyota.
And after the close of regular trading, billionaire Kirk Kerkorian revealed that he sold a chunk of his GM shares. The stock fell to $19.33 after hours.
Hurt by GM, the Dow lost 30.98 points, or 0.3%, to 10,805.55.
Broader market indexes were little changed, however. The Standard & Poor’s 500 eased 0.30 of a point, or 0.02%, to 1,259.62, and the Nasdaq composite dipped 0.32 of a point, or 0.01%, to 2,222.42.
Advancing issues slightly outnumbered decliners on the New York Stock Exchange.
The Russell 2,000 small-stock index edged up 0.53 of a point, or 0.1%, to 672.78. It had tumbled 1.6% on Monday.
In other trading, gold futures closed below $500 an ounce for the first time since Nov. 30 as an index of U.S. inflation declined and as the dollar rallied. Near-term gold futures fell $9 to $494.60.
On Wall Street the market showed little reaction to news of an uptick in housing construction in November, or to a report showing that wholesale inflation dropped 0.7% last month as energy prices receded.
“There’s a lot of uncertainty going into the end of the year,” said Ralph Acampora, managing director of technical research at Knight Capital Group, an asset management firm. One major uncertainty is how many more interest-rate increases the Federal Reserve might be planning, experts say.
“We’ve got a market that’s very concerned about interest- rate increases,” said Franklin Morton, who helps oversee $21 billion at Ariel Capital Management in Chicago.
Long-term Treasury bond yields moved slightly higher after the Commerce Department said housing starts rose 5.3% in November, confounding Wall Street observers who anticipated a slowdown and suggesting that the Fed might extend its credit-tightening campaign.
The yield on the 10-year U.S. Treasury note rose to 4.46%, from 4.44% on Monday. Bond yields rise as their prices fall.
“Housing has been one of the strengths of the economy, and [Tuesday’s] report was bond-negative,” said Mary Ann Hurley, a bond trader at D.A. Davidson & Co. in Seattle.
The dollar jumped against the euro and the yen, in part on expectations of higher U.S. interest rates. The euro sank to $1.186 from $1.201 on Monday. The dollar rose to 117.06 yen from 115.97.
A strike by New York City transit workers had little effect on stock trading volume, which was slightly lower than Monday’s level.
With seven trading sessions to go in the year, the Dow is up 0.2%, the S&P; 500 is up 3.9% and the Nasdaq index is up 2.2%. The Russell 2,000 is up 3.3%.
In other market highlights:
* In the auto sector, Ford Motor fell 18 cents to $8.05 and DaimlerChrysler sank 61 cents to $50.47. Toyota’s U.S.-traded shares surged $1.70 to $99.96.
* Builders’ stocks were mixed on the November housing report. KB Home gained 71 cents to $73.95 and Ryland rallied $1.22 to $74.25, but Toll Bros. was off 27 cents to $35.97.
* Some semiconductor issues moved higher after sinking in recent sessions. National Semiconductor rose 57 cents to $27.08 and Intel added 3 cents to $25.81.
* Near-term oil futures in New York rebounded 64 cents to $57.98 a barrel and helped to pull up energy stocks. Transocean, the world’s largest offshore oil and natural-gas drilling company, rose $2 to $68.45. Occidental Petroleum added $1.53 to $83.13.
* Gold mining stocks were mostly lower as the metal sank. Newmont Mining dropped 95 cents to $49.20, Glamis Gold fell 29 cents to $24.35 and Agnico Eagle lost 40 cents to $18.01.
* Many foreign markets rallied, adding to what have generally been bigger gains than in the U.S. market this year. Australia’s market hit a record high. In Japan the Nikkei-225 index rose 1.6% to a five-year high of 15,641. The Nikkei crossed 16,000 early today.
