U.S. Stocks Mixed As Weak Data Offsets Lower Oil
NEW YORK (MarketWatch) -- U.S. stocks were mixed in volatile trade on Wednesday, after a raft of economic reports -- including on the service-sector, on employment, and on factory orders -- came in weaker-than-expected and tempered an earlier boost from falling crude oil prices.
"Market action is a bit erratic," said Mike Malone, trading analyst at Cowen & Co. "Weaker than expected [service-sector data] first sent the market lower and now we've recovered from those lows."
The market had received an early boost from stumbling oil prices after Iran said it will release 15 British naval personnel it had captured in Gulf waters. Iran is the world's fourth largest producer of crude oil.
The Dow Jones Industrial Average was down 8 points at 12,501, as 18 of its 30 components were in negative territory.
Walt Disney Co. was the worst performer on the Dow, while Microsoft Corp. was gaining the most.
The S&P 500 fell 1.6 points to 1,436, while the Nasdaq Composite rose 0.3 points to 2,450.
Crude futures fell sharply just before the stock market opened as Iran's leader said that the 15 detained British sailors would be freed. Oil had surged past $66 a barrel after the sailors were captured 13 days ago.
But oil recovered some ground recently and was last down 3 cents at $64.61 a barrel, following weekly inventory data.
Investors were also consolidating the strong gains from the previous session, when the market also cheered falling oil prices as tensions between the UK and Iran began to ease. "Expectations were that the situation was going to be resolved anyway," said Cowen's Malone.
On Tuesday, stocks staged a vigorous rally, with the Dow industrials rising nearly 130 points to a five-week high. .
Economic reports fall short of expectations
The market faced pressure soon after the open on Wednesday as investors weighed new data on employment, on the service sector of the economy and on factory orders.
The national survey by Automatic Data Processing suggested payrolls grew by 130,000 in March. The Labor Department will report on the March figures on Friday. Economists surveyed by MarketWatch expect a gain of about 168,000 jobs.
In addition, nonmanufacturing sectors of the U.S. economy expanded at a slower pace during March, the Institute for Supply Management reported Wednesday. The ISM nonmanufacturing index fell to 52.4% from 54.3% in February. Economists were looking the index to rise to 55%.
Finally, factory orders rose 1% in February, less than the 1.9% expected by Wall Street. Excluding transportation equipment, orders fell 0.4%.
Other markets
Treasurys rose after the weak data. The benchmark 10-year Treasury note was last up 6/32 at 99-27/32 with a yield of 4.646%.
Gold futures rose $9.30 to $679.10 an ounce, and copper futures extended Tuesday's rally to $3.33 a pound.
The dollar traded lower against the euro and yen early Wednesday after mixed interpretations of the ADP data in the currency markets.
Stocks in focus
Best Buy Co.'s fourth-quarter earnings report met expectations, but the retailer said it is anticipating margin pressure.
Circuit City reported a fourth-quarter loss due to the costs of closing some stores. It also expects to take a loss in the first half.
The auto sector will be back in focus. DaimlerChrysler Chief Executive Dieter Zetsche, in a statement coinciding with the annual shareholder meeting in Berlin, said the company is in talks with "interested parties regarding future options" for Chrysler. He didn't say who those partners were, or otherwise tip his hand about the negotiations, saying the firm needs "maximum scope for maneuver."
Monsanto posted a higher profit for the second quarter.
Deutsche Bank upgraded telecommunications company Global Crossing to buy from hold on valuation concerns.
Bristol Myers Suibb and ImClone Systems said a 400-patient first-line Phase III study of Erbitux plus platinum-based chemotherapy met the primary endpoint of increasing overall survival in patients with recurrent and metastatic squamous cell carcinoma of the head and neck.
By Nick Godt