U.S. Stocks Open Lower Ahead Of Data
NEW YORK (MarketWatch) -- U.S. stocks opened lower on Tuesday, with investors consolidating some of the market's strong gains while keeping a cautious stance ahead of data on the service sector of the economy and possible comments from Federal Reserve Chairman Ben Bernanke.
A speech by Bernanke, released earlier, was seen as balanced about risks to growth and inflation, and failed to move the market much.
"There was nothing new there, which makes it seem that the Fed is going to stay on hold," said Peter Cardillo, chief market economist at Avalon Partners.
"This is basically a market that's consolidating," Cardillo said, "but it could all change if Bernanke indicates something else" while answering questions after his speech.
The Dow Jones Industrial Average was down 63 points to 13,613, as 29 of its 30 components, led by shares of Dupont , Home Depot Inc. and Alcoa Inc. .
Among blue chips, General Motors Corp. , Walt Disney Co. and DuPont are all due to make presentations to analysts.
The S&P 500 index eased 5.9 points to 1,533, while the Nasdaq Composite lost 7.5 points to 2,610.
Trading volumes showed 88 million shares exchanging hands on the New York Stock Exchange and 146 million trading on the Nasdaq stock market. Declining stocks topped gainers by 19 to 8 on the NYSE and by 15 to 8 on the Nasdaq.
Retail woes
Also helping to dampen sentiment before the open, Bed Bath & Beyond fell 5.4% after the retailer issued its first-ever profit warning as a public company. Goldman Sachs downgraded the stock to neutral from buy.
Investor attention will now turn to the 10 a.m. release of the Institute of Supply Management's non-manufacturing index, which is expected to show the service sector fell slightly in May.
Shanghai recovers
"This market managed to shrug off China yesterday," Avalon's Cardillo said. "This market is doing its own thing with all the M&A still out there."
U.S. stocks ended Monday with a modest rise, overcoming a tumble in Shanghai-listed stocks, rising crude-oil prices.
Overnight, the Shanghai Composite lost 7% before recovering and closing on a 2.6% gain.
Treasury Secretary Henry Paulson is also due to be speaking on the U.S.-Chinese economic relationship, a topic of increased focus amid the gyrations of Chinese stock markets in the last week.
Yet more deals
Avaya gained 2.3% after agreeing, as rumored, to be bought by TPG Capital and Silver Lake Partners for $8.2 billion, or $17.50 a share in cash.
Amgen late Monday agreed to buy privately held Ilypsa for $420 million. For virtually the same amount of cash, Ericsson agreed to buy German billing software firm LHS.
By Nick Godt