U.S. Stocks Reconsider Losses As Nasdaq Pulls Higher
NEW YORK (MarketWatch) - U.S. stocks scaled back losses on Tuesday as a leading indicator of the housing market proved less dire than anticipated and offset disappointment that came as Texas Instruments Inc. and FedEx Corp. cut their earnings forecasts.
The National Association of Realtors reported its index of sales contracts on previously owned homes fell 0.7% in October from the prior month, and declined 1% from the previous year.
"Though the housing market remains in distress, it doesn't appear to be getting much worse," said analysts at Action Economics.
The Dow Jones Industrial Average fell 62.21 points to 8,871.97, with 20 of its 30 components trading lower.
The S&P 500 gained 1.69 points to 911.39 and the Nasdaq Composite climbed 18.53 points to 1,590.27.
Consumer staples, industrials and utilities led losses among the S&P's 10 industry groups, while energy, information technology and materials fronted gains.
Volume on the New York Stock Exchange hit 237 million shares, and advancers topped decliners 5 to 4. On the Nasdaq, 172 million shares traded hands, and advancers pulled ahead of decliners 7 to 5.
Ahead of the opening bell, the International Council of Shopping Centers and Goldman Sachs reported chain-store sales declined 0.8% last week from the prior week, and gained only 0.4% from the year-ago period.
"The tough economic and retail environment, which continued into early December, is likely to dominate the full month's sales performance as well," said Michael Niemira, ICSC's chief economist.
In focus on the economic front Tuesday are the latest figures on October pending home sales.
The dollar strengthened against most currencies but slipped against the yen. The euro fell 0.9% to $1.2815, while the dollar was down 0.3% against the Japanese currency at 92.62 yen.
Oil prices also remained fairly steady in early futures trade on the New York Mercantile Exchange. Light crude for January delivery gained 20 cents to $43.91 a barrel.
The auto industry is set to remain in focus after Democratic leaders sent the White House a $15 billion bill to rescue the sector.
The proposal, which reportedly could give the government an ownership stake in the industry, requires long-term restructuring plans and other concessions from the Big Three in exchange for a federal lifeline.
The latest round of profit warnings and job cuts rolled on, with TI and FedEx among the companies cutting their forecasts late Monday.
Also in the chip sector, National Semiconductor moved to scale back production and said sales in the current quarter would likely be down around 30%.
Sony Corp. said Tuesday it plans to cut 8,000, or 5%, of the jobs in its electronics division, as well as close manufacturing sites worldwide in an effort to save around $1.1 billion.
Also Tuesday, AutoZone Inc. reported fiscal first-quarter earnings of $2.23 a share compared to $2.02 a share a year earlier. Analysts had been expecting earnings of $2.20 a share.
In international markets, Japan's Nikkei 225 rose 0.8% and the U.K.'s FTSE 100 index added 1.5%.
U.S. markets climbed Monday, with the Dow Jones Industrial Average closing at its highest level in a month, as investors cheered President-elect Barack Obama's pledge on infrastructure investment and a likely deal for the auto industry.
By Kate Gibson