Stocks end mixed after early sell-off
Wall Street pared steep early losses Monday to end mixed after a surprise drop in new-home sales for February triggered further concern that economic growth was slowing more than expected.
The Commerce Department reported that sales of new single-family homes fell by 3.9% last month to a seasonally adjusted annual rate of 848,000. It was the slowest sales pace in nearly seven years and dimmed hopes for a rebound in the troubled housing market.
Economists have been watching the housing industry for a hint about where the economy is heading. The disappointing data came amid continued concern about the sub-prime mortgage market, which has been slammed by a jump in delinquencies in recent months.
The home-sales report sent the Dow Jones industrial average down as much as 114 points early in the day. But buyers soon took control, and the market climbed steadily the rest of the session.
The Dow ended with a loss of 11.94 points, or 0.1%, at 12,469.07.
Broader indexes were mixed. The Standard & Poor’s 500 added 1.39 points, or 0.1%, to 1,437.50, and the Nasdaq composite gained 6.70 points, or 0.3%, to 2,455.63.
The Russell 2,000 small-stock index eased less than 0.1% to 809.94.
“There’s been a whirlwind of attention about housing’s effects on the economy. It isn’t anything new and these pullbacks are buying opportunities,” said Todd Salamone, director of trading at Schaeffer’s Investment Research in Cincinnati.
The Dow surged 3.1% last week amid a global rebound in stocks.
The market Monday also shook off another rise in oil prices. Near-term crude futures gained 63 cents to $62.91 a barrel in New York, the highest since December. The price has risen steadily on continued tensions between Iran and the West after Iran’s detention of British naval personnel.
Some stock investors may be bargain hunting with the first quarter drawing to a close, analysts said. Technology issues in particular seemed to be in demand Monday, said John O’Brien, senior vice president at MKM Partners in Cleveland.
Investors are likely to focus intently on a spate of economic data due out this week, including the Conference Board’s consumer confidence survey today and a government report Friday on consumer spending in February.
In other trading Monday, the yield on the benchmark 10-year Treasury note slipped to 4.60% from 4.61% on Friday.
The dollar was mixed against other major currencies. It hit a 10-year low against the Australian dollar.
In other market highlights:
* Home builders’ shares fell on the sales data. KB Home lost 87 cents to $45.99 and Ryland Group was off 52 cents to $45.60.
* Dell helped lead the tech sector higher, rising 79 cents, or 3.5%, to $23.62 after a Goldman Sachs analyst said the computer maker should see benefits from its turnaround efforts this year.
Also, EBay climbed $1.39 to $33.22 after Goldman Sachs recommended buying the shares, saying they might climb to $40 this year. Goldman also raised its revenue and profit estimates for EBay on a better-than-expected increase in new listings.
* Apple jumped $2.33 to $95.85. The company may benefit from wider iPhone profit margins and strong demand for Macintosh personal computers, said Deutsche Bank Securities, which raised its share-price forecast and profit estimates.
* Microsoft erased early losses after the software leader said it sold 20 million licenses of the Windows Vista operating system in its first month of wide availability, topping some analysts’ estimates. Its shares advanced 20 cents to $28.22.
* Citigroup dipped 18 cents to $51.54. The Wall Street Journal reported that the financial giant might reduce its workforce by about 5%. The company has been under pressure during the last year to boost earnings to fend off rivals from eating into its global market share.
* Walgreen reported second-quarter profit that surpassed Wall Street projections as the drugstore chain posted robust revenue from retail prescriptions. But the stock, which rose 3.3% last week, eased 47 cents, or 1%, to $47.30.
* Fiscal fourth-quarter profit at Tiffany was essentially flat as the luxury jewelry retailer wrote down the value of its Caribbean stores. Revenue, however, rose 15% to $986 million. Results came in ahead of Wall Street’s expectations. The stock rose 13 cents to $45.63 after hitting a 52-week high of $46.09 at the open.
* Boston Scientific plunged to a level not seen since September 2002 after researchers said at a medical meeting over the weekend that a drug-coated stent from Abbott Laboratories was safer and more effective than Boston Scientific’s Taxus stent.
Shares of Boston Scientific fell $1, or 6.6%, to $14.22 for the biggest loss in the S&P; 500. Abbott gained $3.38 to $57.24, its highest since at least July 1980. Abbott’s 6.3% advance was the largest in the S&P; 500.
* Goodyear Tire rose $1.47 to $31.76. North America’s biggest tire maker sold a unit that makes hoses and conveyor belts to buyout firm Carlyle Group for $1.5 billion. Shares of Goodyear, which said it was focusing on its core tire business, traded at their highest level since 1999 and are up 51% this year.
* Among other deals, Beckman Coulter, a Fullerton-based maker of laboratory equipment, said it would acquire Biosite for $1.55 billion, or $85 a share, to add heart-disease diagnostic tests. That’s equivalent to a 53% premium to Biosite’s closing price Friday.
Beckman Coulter shares fell $4.57 to $62.51. Biosite shares jumped $28.42 to a record $83.80.
* Osiris Therapeutics rallied $2.87, or 16%, to $20.77. The company’s stem-cell treatment helped patients recover after a heart attack and eased their symptoms, according to research presented at the American College of Cardiology meeting.
