Stocks end mostly higher
The stock market closed mostly higher Tuesday after a huge two-session rally, even after disappointing reports on consumer sentiment and the housing market.
Share prices slid early in the day, with the Dow Jones industrial average trading down nearly 100 points, after the Conference Board said its consumer confidence index sank to a five-year low in March and the Standard & Poor’s/Case-Shiller index indicated that U.S. home prices fell 11.4% in January, the steepest drop in more than 20 years.
After shooting up a total of nearly 450 points Thursday and Monday, the Dow closed down 16.04 points, or 0.1%, to 12,532.60.
Despite the Dow’s drop, most market indexes scored modest gains to mark their third consecutive advance. That boosted hopes that the market could stay in recovery mode after the heavy losses of recent weeks.
The Standard & Poor’s 500 index rose 3.11 points, or 0.2%, to 1,352.99, recording its first daily change of less than 1% in more than a week.
The Nasdaq composite index added 14.30 points, or 0.6%, to 2,341.05.
The Russell 2,000 index of smaller-company stocks rose 3.99 points, or 0.6%, to 705.27.
Winners topped losers by nearly 2 to 1 on the New York Stock Exchange. Trading volume continued to ebb from last week’s strong pace.
Treasury yields fell after rising sharply Monday. The yield on the benchmark 10-year T-note sank to 3.51% from 3.56% late Monday. The dollar fell against other major currencies.
Oil prices wobbled. Crude futures settled at $101.22 a barrel, up 36 cents, on the New York Mercantile Exchange.
Commodity-related stocks, high-flying until a sharp downturn this month, were the standouts Tuesday as prices of key raw materials rebounded for a second day.
The Reuters/Jefferies CRB index of 19 raw materials, which plunged 9.2% in the week that ended Thursday, is up 2.1% since last week, including a 1.6% rise Tuesday.
“Prices across the commodity space dropped pretty dramatically” last week, said Malcolm Polley, chief investment officer at Stewart Capital Advisors in Indiana, Pa. “That gave investors like myself that pay attention to valuations an opportunity to start to build positions in names we like.”
Among commodity-related shares, fertilizer maker Potash rose $6 to $156.80, U.S. Steel gained $6.06 to $124.56 and Southern Copper added $2.16 to $104.02.
Also, Monsanto jumped $10.29, or 9.9%, to $114.54 after the agricultural products supplier said earnings per share for the second quarter and all of fiscal 2008 would be higher than previously projected.
Mining stocks gained as gold rebounded $16.30 to $934.60 an ounce in futures trading. Prices of silver, copper and aluminum also climbed. Barrick Gold rose $1.61 to $43.55. Agnico Eagle jumped $4.18 to $70.35.
Freeport-McMoRan climbed $3.65 to $92.41. Newmont Mining added $1.36 to $46.82. Alcoa increased 70 cents to $35.74.
Among the day’s market highlights:
Bear Stearns fell 31 cents, or 2.8%, to $10.94 -- still above the sweetened $10-a-share buy-out price offered by JPMorgan Chase, whose shares fell 49 cents to $46.06.
Yahoo rose $1.21, or 4.4%, to $28.73 on speculation Microsoft will raise its takeover offer for the Web company beyond the current bid of $31 a share. Microsoft fell 3 cents to $29.14.
Bank of America fell $1.48, or 3.5%, to $40.97 after the stock was downgraded to “sell” from “neutral” by Merrill Lynch, which also reduced its earnings estimates for the company to account for credit losses.
Lehman Bros. Holdings, the biggest underwriter of U.S. mortgage bonds, fell $1.43 to $45.21 after Fox-Pitt Kelton analysts cut profit estimates.
Thornburg Mortgage jumped 46 cents to $1.73 after the mortgage lender said it would raise $1.35 billion in a private placement in a bid to avoid bankruptcy.
MGIC Investment sank $1.05 to $12.25 after the country’s largest mortgage insurer said it was boosting its public offering of stock by 20%.
Meritage Homes climbed $1.97 to $20.87. An analyst upgraded the stock, saying the home builder had been able to reduce inventory and generate cash.
Sirf Technology Holdings tumbled $1.96 to $4.93. The maker of chips for global positioning systems cut 7% of its workforce and lowered its first-quarter sales outlook, citing soft demand.
European markets surged Tuesday, their first day of trading after the two-day rally in the U.S. Key share indexes climbed 3.5% in Britain, 3.2% in Germany and 3.5% in France. Shares in Japan rose 2.1%.
