Stocks Down Broadly for a Second Session
Stocks ended broadly lower for a second straight session on Tuesday, as some upbeat news on October retail sales and wholesale inflation was offset by a worrisome sales outlook from Target Corp.
Investors also failed to be cheered by another drop in oil prices, which ended below $57 a barrel, the lowest in nearly four months.
The market rallied in the first half of the session, then sold off in the final two hours.
The Dow Jones industrial average slipped 10.73 points, or 0.1%, to 10,686.44. But as on Monday, the broader market fared worse.
The Standard & Poor’s 500 index lost 4.75 points, or 0.4%, to 1,229.01; the technology-heavy Nasdaq composite dropped 14.21 points, or 0.7%, to 2,186.74.
Losers topped winners by more than 2 to 1 on the New York Stock Exchange and on Nasdaq.
Stocks have stalled out this week after rallying the last three weeks on generally favorable economic data and some strong third-quarter earnings reports.
On Tuesday, a government report showed that October retail sales, excluding autos, were better than expected. Also encouraging was a report showing that a gauge of wholesale prices declined last month, excluding food and energy costs.
But Target soured the mood with its warning late Monday that it expected November sales growth to lag behind earlier guidance. The retailer’s shares plunged $4.13 to $54.30.
Some analysts said the market was digesting recent gains and should begin to draw strength from oil’s slide. Near-term crude futures in New York fell 71 cents to $56.98 a barrel, the lowest since July 20, on expectations of rising U.S. inventories.
The decline in oil prices “sets us up for gradual appreciation [in share prices] going into year-end,” predicted Jack Caffrey, equity strategist for JPMorgan Private Bank.
With less than seven weeks to go this year, the Dow is down 0.9% year to date, the S&P; 500 is up 1.4% and the Nasdaq composite is up 0.5%.
In the Treasury bond market on Tuesday yields dipped, which some analysts said reflected comments by Federal Reserve chairman-nominee Ben S. Bernanke at his Senate confirmation hearing. Bernanke pledged to continue outgoing Chairman Alan Greenspan’s efforts to control inflation.
The 10-year T-note yield fell to 4.56% from 4.61% on Monday. Yields have risen as the Fed has continued to lift short-term interest rates this year, but in the long run bond yields could drop if the Fed succeeds in keeping a lid on inflation, analysts say.
Among the day’s market highlights:
* The retail sector was weak, hurt by Target and by some mixed earnings reports from other store chains. J.C. Penney fell $1.54 to $52.21 on its report. Also in the sector, Federated Department Stores lost $1.91 to $66.71 and Nordstrom dropped $1.69 to $36.87.
* General Motors slid $1.13 to $22.61, the lowest in at least 13 years, on continuing fears about its financial health.
* On the plus side, Apple Computer gained 83 cents to $62.28 and IBM jumped $1.17 to $85.53 after a fund controlled by billionaire George Soros disclosed it had purchased stakes in the companies.
* McDonald’s lost 62 cents to $33.31 after rejecting a call by shareholder Pershing Square Capital to spin off 65% of its company-owned restaurants in a stock offering and borrow $15 billion to buy back stock.
* Six Flags was unchanged at $7.32. Proxy advisor Institutional Shareholder Services said the theme park company’s investors should back Washington Redskin owner Daniel Snyder’s efforts to increase his stake in the firm and remove three directors.
