U.S. Stocks Open Higher Ahead Of Housing Data
NEW YORK (MarketWatch) -- U.S. stocks opened modestly higher Tuesday, as investors sought attractively priced shares after recent weakness and were cheered by deal news ahead of a key report on the housing market.
The Dow Jones Industrial Average was up 29 points at 13,381, as 23 of its 30 components advanced, led by American Express Co. , Boeing Co. , Citigroup Inc. and 3M Co. .
Also among blue chips, Altria Group Inc. rose slightly. The company said will take a charge of $325 million, or 10 cents a share, againts results for the second quarter. The charge is linked to plans to shut down its 2,500-employee Philip Morris cigarette factory in Cabarrus, N.C., by 2010 in a move to cut costs.
The S&P 500 gained 6.5 points to 1,504, while the Nasdaq Composite rose 13.5 points to 2,590.
On Monday, stocks closed a volatile session with mild losses amid continued nervousness about subprime lending and the near collapse of two hedge funds owned by Bear Stearns Cos. Inc. , with exposure to that sector. The Dow first rallied to gain over 120 points in the morning before falling back to close down 8 points.
On Tuesday, Bear Stearns gained back some ground, adding 0.5%, along with Goldman Sachs and Lehman brothers .
Monday's losses followed a heavy selloff on Friday, leaving investors to ponder the market's next move.
"Technically, the market took a big blow on Friday. A snap-back bounce proved to be little more than a trade and not a major market turn," said Marc Pado, U.S. strategist at Cantor Fitzgerald. "Now we have to focus on what will make this decline accelerate."
The May new-home sales due at 10 a.m. Eastern time, could provide a catalyst for trade. Concerns about the slump in the housing market is another factor that has put pressure on the stock market.
Based on a MarketWatch poll, economists are forecasting that sales of new homes amounted to 930,000 units last month, which would be up from 981,000 in April, and consumer confidence is projected to show a reading of 105.0 for June, which would down from 108.0 in May.
Homebuilder Lennar Corp. , meanwhile, slumped 1.2% after posting a quarterly loss, citing continued deterioration in the housing market. The firm also forecast further weakness.
Stocks on the move
Shares of retailer Target Corp. fell 0.2%. The company said that June same-store sales growth will be at the low end of its planned 3%-to-5% range.
On the earnings front, Kroger Co. fell 4.2%. It reported quarterly earnings before special charges that exceeded analyst's expectations and a gain in revenue. There were few premarket quotes for the supermarket operator's stock, but it should be active after the opening.
There also are earnings reports scheduled for and Nike Inc. after the Tuesday close.
Meanwhile, the Dutch advocate general declared that ABN Amro's planned $21 billion sale of its LaSalle unit to Bank of America doesn't require a shareholder vote. The decision is viewed as advancing Barclays plc in its bid to acquire ABN Amro.
Also on the deals front, BlackRock Inc. agreed to buy the fund-of-funds business of Quellos Group for up to $1.7 billion. BlackRock said the deal will make it one of the largest fund-of-funds providers, with over $25.4 billion under management.
Other markets
Treasurys were pinned in a narrow range ahead of Thursday's Fed rate decision. The central bank is widely expected to leave the fed funds rate unchanged at 5.25%., but its accompanying statement should provide clues as to whether a rate increase or cut could be in store in coming months.
The benchmark 10-year note was unchanged at 95-17/32 with a yield of 5.081%.
The yen overnight managed to strengthen against its major rivals after Japanese Finance Minister Omi said he is "watching foreign exchange rate moves very closely", which finally signals some sort of preoccupaton by Japanese officials regarding their damaged currency, according to Ashraf Laidi, a currency analyst at CMC Markets.
The dollar last was down 0.5% at 122.94 yen as the euro rose 0.07% to $1.3472.
Commodities prices were pushed lower ahead of the data reports later in the morning. The front-month crude futures contract last was 30 cents lower at $68.88 a barrel as the August gold contract fell $3.90 to $650.80 an ounce.
By Leslie Wines