U.S. Stocks Post Modest Gains Following Economic Data
NEW YORK (MarketWatch) -- U.S. stocks on Tuesday wobbled higher in light volume, as energy shares fronted limited gains and after mixed data on the housing front and a better-than-forecast rise in consumer confidence.
One veteran market expert said the few traders working Tuesday were likely more interested in presumed presidential nominee Barack Obama's stance on the capital gains tax than on the usual market fare.
"There is going to be more attention paid to what is happening at the Democratic National Convention than the economic data calendar. This is the only week of the year when politics can take over economic data, geopolitical concerns and commodity prices," said Art Hogan, chief market strategist at Jefferies & Co.
After traveling in positive and negative turf, the Dow Jones Industrial Average was recently up 14.65 points to 11,400.90, with 16 of its 30 components trading higher, led by financial shares including J.P. Morgan Chase and American International Group Inc., , both up about 2%.
As of Monday's close, the blue-chip index was on track for a monthly gain, up 0.7% in August, with the U.S. consumer services index climbing the most, posting a 3.73% gain, according to preliminary figures released Tuesday by Dow Jones Indexes.
The initial look at the still-to-be completed month had the U.S. consumer services index climbing the most, posting a 3.73% gain, while the Dow Jones U.S. Basic Materials Index lost the most, falling 6.09% in August, Dow Jones Indexes said.
The S&P 500 added 4.59 points to 1,271.43, while the Nasdaq Composite rose 3.91 points to 2,369.50.
While energy shares fronted gains among the S&P's 10 industry groups, financial companies also offered support, bouncing back from Monday's steep drop.
Information technology, consumer staples and the consumer discretionary sectors were all fractionally lower.
Volume on the New York Stock Exchange neared 338 million, and advancing stocks outran those declining nearly 2 to 1. On the Nasdaq, 252 million shares were exchanged, while advancers topped decliners 7 to 5.
Numbers game
Ahead of the opening bell, Standard & Poor's reporting the Case-Shiller index of 20 major metropolitan areas last month fell 15.9% from June 2007.
"Consumer confidence rose to 56.9 in August versus 51.9 in July probably because of the drop in oil prices. Pay close attention to Hurricane Gustav because this could end up being a powerful storm that could derail the current drop in crude oil," said Morgan Keegan analyst Kevin Giddis.
On Tuesday, the hurricane was deemed enough of a threat to supplies that crude futures climbed, with the contract for October delivery up 54 cents to $115.65 a barrel on the New York Mercantile Exchange. .
"Although consumers have received some relief from lower energy prices, they are still struggling with rising unemployment, tighter credit and declining home prices. This has kept consumer confidence in recession territory," wrote Lehman Brothers analyst Michelle Meyer in a late morning note.
Later data included a report from the Commerce Department that showed a 2.4% rise in the sale of new U.S. homes last month, but also included downward revisions for prior months that in the end painted a far weaker pace for July than analysts were looking for.
The Office of Federal Housing Enterprise Oversight said U.S. home prices fell a seasonally adjusted 1.4% in the second quarter, with the numbers based on repeat sales of homes mortgaged through Fannie Mae and Freddie Mac .
Separately, the Conference Board reported U.S. consumer confidence rose in August for a second month straight of gains, but the level remained relatively low amid persistent job concerns. .
On Monday, U.S. stocks dropped as credit-crunch fears were back at the forefront.
By Kate Gibson