Stocks finished mixed on Tuesday, as gains driven by lower oil prices were offset by profit taking in chip stocks.
The Dow Jones industrial average added 25.58 points, or 0.25%, to end at 10,098.63. The broader Standard & Poor's 500 index finished up 0.51 point, at 1,096.19. The tech-heavy Nasdaq composite index finished down 1.81 points, or 0.1%, to 1,836.89.
Airlines rose thanks to a drop in oil prices, but broad weakness in semiconductor and telcommunication equipment stocks weighed on the Nasdaq.
On Wednesday, investors will focus on a July read of durable goods orders, which are expected to jump 2.0%. A read of new home sales also arrives, though sales are expected to slip.
"Expectations are for a more defined trend in the market, as more conrete data should clarify the evolving economic outlook," says economic research firm Informa Global Markets. Meantime, low-volume trade -- given that many traders on Wall Street are on vacation -- along with concerns about terrorism and the upcoming U.S. presidential election, are keeping cash away from the pits, notes Michael Farr, president and chief investment officer investment firm Farr, Miller & Washington.
For the third day, oil prices moved lower. The October West Texas Intermediate (WTI) crude oil price shifted lower to $45.21 per barrel, as oil continues to flow in Iraq despite continued unrest in Najaf. Plus, Russian President Vladimir Putin assured President George Bush that Russia will boost its oil output to counter rising prices. Still, Russian oil giant Yukos remains under fire as it cut its 2004 crude oil production forecast to 86 million tons (down from 90 million) to reduce its capital expenditures related to its tax liabilities.
Still, dealers caution that crude could rally if prices crack the $46.10 level, according to S&P's MarketScope.
Gold prices were also lower on Tuesday, reaching $405, as the U.S. dollar rose vs. major currencies and oil futures fell.
In economic news Tuesday, the pace of existing home sales dropped somewhat in July, to a 6.72 million annualized pace, down 2.9% from a revised 6.92 million pace in June. "Both the July result and the June revision are softer than thought," says Informa Global Markets. Sales declined in every region except the South, where sales rose 11.7%.
Shares of Caterpillar (CAT) helped keep the Dow average in positive territory, following a Goldman Sachs upgrade to outperform from in-line. Caterpiller added 1.5%.
Retailers recouped some of their Monday losses, after Target (TGT) said its August same-store sales were on track. Yesterday, Wal-Mart (WMT) reported that its U.S. August comparative store sales would be flat to up 2%. Target shares added 1.4%.
Also, Federal Reserve governor Ben Bernanke said that third-quarter consumer spending is solid, and that the impact of high oil prices on economic recovery is limited, according to S&P MarketScope.
In semiconductors, Infineon Technologies (IFX) says it expects the global semiconductor market to grow more than 22% this year. The head of U.S. operations tells Die Welt that there are plans to expand in the U.S., particularly in the memory chip sector. Shares ended 1.1% lower.
In finance, General Electric (GE) plans to expand its retail banking operations in emerging European and Asian markets, becoming more formidable rival for Citigroup (C), according to the Wall Street Journal.
Trucking firm Yellow (YELL) says that its overall business trends are in line with its internal forecast for the third quarter. The company expects its third-quarter earnings per share to be at least within its previously guided range of $1.20 to $1.25. Shares gained 2.1% higher.
Health care equipment stocks were feeling pressure from poor study results from medical device company, Possis Medical (POSS). Possis shed 40% after saying that results from its blood clot remover showed that it likely shouldn't be used to treat heart attack patients. The company also cut its fiscal 2005 EPS estimates. First Albany downgraded the stock.
Elsewhere in corporate news, H.J. Heinz (HNZ) posted first-quarter earnings from continued operations of 55 cents per share, vs. 53 cents a year ago, on a 5.3% revenue rise. S&P reiterated its hold rating of the stock. Shares finished 2.8% higher.
H&R Block (HRB) will report its first-quarter earnings after the market close.
This week's economic calendar remains thin. Highlights include a Thursday read of initial jobless claims, followed by Friday's second-quarter gross domestic product revision and final Michigan sentiment for August.
Also on Friday, Federal Reserve Chairman Alan Greenspan will speak on demographic changes at the Kansas City Fed's annual monetary policy conference in Jackson Hole, Wyoming. Analysts don't expect Greenspan to talk about Fed policy.
The earnings calendar is also somewhat light this week, with traders hearing quarterly updates from Krispy Kreme (KD), and Dollar General (DG).
U.S. Treasuries finished higher in price, recovering from morning weakness and lower oil prices. The beginning of month-end buying turned prices positive, reports Informa Global Markets.
In currencies, the dollar continued to gain ground against major currencies, hitting its highest level vs. the euro since early August. The euro was worth $1.207, the British pound was at $1.79, while the U.S. dollar was at 109.61 yen.
European stock markets finished mixed on Tuesday, aided slightly by the falling price of oil. London's Financial Times-Stock Exchange 100 index gained 2.2 points, or 0.05%, to 4,407.5.
British Airways was higher for a second day, after announcing it would more than double a surcharge on long-haul fares to recoup the cost of rising fuel prices. Meantime, many BA customers were left sleeping at Heathrow, as the airline reportedly lacked enough baggage handlers and check in staff to accomodate its scheduled flights.
Germany's DAX index lost 1.14 points, or 0.03%, to 3,771. A government report showed German exports lifted second-quarter growth by 0.5%, as consumer spending stagnated and corporate investment declined. "There is concern that the pace of expansion may slow," reports S&P's MarketScope.
In Paris, the CAC 40 index added 4.69 points, or 0.13%, to 3,594.38, also aided by weaker oil prices.
Asian markets finished higher on Tuesday. Japan's Nikkei 225 index added 24.36 points, or 0.22%, to close at 10,985.33. In Hong Kong, the Hang Seng index gained 214.72 points, or 1.73%, to close at 12,646.49.