Stocks finish little changed
Stocks ended mixed Tuesday as investors grappled with concerns about consumer spending in some parts of the economy while technology stocks showed broad gains.
Falling energy prices appeared to lend support to stocks as investors tried to balance concerns about weakness in the economy with hopes that lackluster indicators about the health of the consumer and the housing market could bolster the case for lower interest rates.
Retailers Target and Lowe’s trimmed their expectations for the year because of slowing sales, while home builder Lennar posted a fiscal third-quarter loss and sharply lower revenue.
The economic reports offered fresh evidence that consumer sentiment is taking a hit amid the worst housing slump in more than a decade. The Conference Board said its consumer confidence Index fell in September to its lowest level in almost two years. The National Assn. of Realtors reported that sales of existing homes fell for a sixth straight month in August to the slowest annual rate in five years.
The Dow Jones industrial average rose 19.59 points, or 0.1%, to 13,778.65, the Standard & Poor’s 500 slipped 0.52 points to 1,517.21 and the Nasdaq composite rose 15.50 points, or 0.6%, to 2,683.45. The Russell 2,000 index of smaller companies fell 2.80 points, or 0.3%, to 803.00.
Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange. Treasury bond yields were little changed. The benchmark 10-year note ended at 4.63%, unchanged from late Monday. The dollar again closed at a record low against the euro, while gold edged lower after a recent run-up.
Oil prices continued their slide after hitting a record high last week. Crude futures lost $1.42 to settle at $79.53 a barrel on the New York Mercantile Exchange. It was the first time in more than a week that oil closed below $80 a barrel.
Shares of home builders fell on the housing data and Lennar’s report of a big quarterly loss. An S&P; index of builder stocks slid 2.3% to a four-year low.
Lennar shares slumped 96 cents, or 4%, to $23.22. The company posted a loss of $513.9 million for its fiscal third quarter as it saw sharply lower revenue from falling home prices and booked hefty charges to write down land values. KB Home dropped 65 cents, or 2.5%, to $25.09.
Target and Lowe’s cut their sales forecasts for the year because of uncertainty about the upcoming holiday shopping season. Target fell $2.95, or 4.6%, to $61.35, and Lowe’s declined $2.04, or 6.7%, to $28.51.
Among other retailers, Home Depot slipped 80 cents, or 2.4%, to $33.08 for the steepest decline in the Dow average. Wal-Mart Stores dropped 81 cents, or 1.8%, to $43.16. Bed Bath & Beyond, which reports quarterly results today, fell $1.47, or 4.2%, to $33.20.
Restaurant operator McCormick & Schmick’s Seafood plunged $5.74, or 23%, to $19.32 after the company lowered its third-quarter earnings forecast because of weak customer traffic.
Some investors appeared to regard technology stocks as less at risk of a slump in demand should the economy falter. Apple rose to another record, and BlackBerry maker Research in Motion hit a 52-week high.
Apple traded as high as $153.22, topping its previous trading high of $149.85, and finished up $4.90, or 3.3%, to $153.18. Research in Motion, meanwhile, climbed $2.32, or 2.5%, to $96.82 after setting a new 52-week trading high of $96.85.
Microsoft climbed 48 cents, or 1.7%, to $29.56. “Halo 3,” the latest version of the software giant’s bestselling Xbox video game series, went on sale Tuesday. A Microsoft executive said the game’s first-day sales in the U.S. might surpass $170 million. At least 480,000 people have already played “Halo 3” online, according to the website of the Microsoft studio that makes the game.
In other market highlights:
ValueClick surged $2.85, or 13%, to $24.85. A research firm said the Westlake Village-based Internet advertising broker might be acquired by Microsoft, Yahoo, News Corp. or a traditional ad agency.
Vonage Holdings fell 66 cents, or 34%, to $1.30 after a federal jury Tuesday ordered the provider of Internet-based phone service to pay $69.5 million to Sprint Nextel for patent infringement, plus a 5% royalty on future revenue. Sprint rose 13 cents to $18.43.
In after-hours trading, Red Hat shares rose 90 cents, or 4.8%, to $19.79 after the seller of Linux operating-system software said profit rose 64% on strong sales of new products. The company also gave an earnings forecast that matched analysts’ estimates.
Resources Connection fell $3.11, or 11%, to $26.22 in after-hours trading. The Costa Mesa-based provider of legal and accounting services said fiscal first-quarter revenue was $194.1 million, missing the average analyst estimate of $197.1 million.
Overseas, key stock indexes climbed to records in Brazil, India and Australia. Elsewhere, shares dropped 1.1% in Britain, 0.2% in Germany, 0.9% in France and 0.5% in Hong Kong. In Japan, stocks fell 0.6%.
