Stocks end flat on weak data
Stock prices fell sharply early Tuesday before recovering to finish the day mostly flat amid weak economic data and some disappointing corporate earnings.
The Dow Jones industrials fell for the first time in six sessions. Stocks have rallied for most of April and early May on robust first-quarter earnings and a wave of major takeover deals. After shares tumbled early in Tuesday’s session, some investors identified their first buying opportunity in some time.
“The buy-the-dip crowd came in quickly,” said Joe Saluzzi, co-manager of Themis Trading in Chatham, N.J.
Data released Tuesday showed the economy continuing to sputter. The Commerce Department reported that wholesalers’ inventories grew at a slower rate in March, failing to meet projections, and the National Assn. of Realtors lowered its forecast for the housing market this year because of stricter lending standards and sub-prime mortgage woes.
The latest data didn’t alter expectations that the Federal Reserve would leave interest rates unchanged today. Wall Street will be looking for an indication from the central bank about whether it might trim rates later in the year.
There was a “wait-and-see pullback with regard to what the Fed might do,” said Janna Sampson, a portfolio manager for Oakbrook Investments. “Given the run we’ve had, and a pretty strong start of the year, this might be a case of investors positioning their portfolios a little sooner than usual before the summer doldrums.”
The Dow Jones industrial average edged down 3.90 points to 13,309.07. The blue-chip average had risen in 24 of the previous 27 sessions, and Monday it surpassed the 13,300 mark for the first time.
Broader stock gauges were narrowly mixed. The Standard & Poor’s 500 index was down 1.76 points, or 0.1%, at 1,507.72, and the Nasdaq composite index inched up 0.80 of a point to 2,571.75.
The Russell 2,000 index of smaller-company stocks was down 0.97 of a point, or 0.1%, at 830.90.
Declining issues outpaced advancers by 3 to 2 on the New York Stock Exchange.
Bond yields slipped. The yield on the benchmark 10-year Treasury note fell to 4.62% from 4.63% late Monday.
The dollar fell against the yen but gained against the euro, while gold prices slipped.
Oil prices advanced amid fears of a supply disruption after the bombing of three major oil pipelines by militants in Nigeria. Crude futures rose 79 cents to $62.26 a barrel in New York.
A smattering of companies, including insurance broker Marsh & McLennan, investment bank Lazard and online travel agency Expedia, posted profits below analysts’ forecasts.
Shares of Marsh & McLennan shed 80 cents, or 2.5%, to $31.13. Lazard declined 55 cents, or 1%, to $53.35. Expedia fell 61 cents, or 2.5%, to $24.20.
Conglomerate Tyco International fell 67 cents, or 2.1%, to $32.05, after the company reported lower quarterly earnings. The results beat analysts’ estimates thanks to a lower tax rate.
In other market highlights:
* Speculation that Countrywide Financial might be acquired helped give the largest U.S. mortgage lender the best performance in the S&P; 500. Countrywide jumped $2.77, or 7.2%, to $41.28.
* Hewlett Packard rose $1.21, or 2.8%, to $45.01 after the company lifted its second-quarter forecast because of strength in its PC and server business.
* Warner Music Group fell 16 cents to $17.14. The company posted a wider second-quarter loss because of restructuring costs but surpassed projections for profit after certain items.
* Shares of Motorola fell 38 cents, or 2.1%, to $17.70 after activist investor Carl Icahn failed in a bid to win a seat on the mobile phone maker’s board.
* AK Steel Holdings soared $2.96, or 9.2%, to $35.02 after a report that the company was being eyed by ArcelorMittal, the world’s largest steel maker.
* Florida East Coast Industries gained $10.78, or 15%, to $84.91. The real estate developer and regional railroad operator agreed to be acquired by private equity funds managed by Fortress Investment Group in a deal valued at $3.5 billion.
* Indexes fell in Britain, Japan, Germany and France.
