US stocks cut gains to end mostly flat after a late-day sell-off on Tuesday as yet another cautious statement from the Federal Reserve on the economy offset strong retail sales data for November. With trading volume still anaemic, the afternoon's drop could be a sign that the major indexes have hit the upper range of a rally that has propelled them all to recent two-year highs.
The Fed, in a policy statement after its last scheduled meeting of 2010, said the economic recovery was still too slow to bring down unemployment and reaffirmed its commitment to buy $600 million in government bonds. The move pushed bond yields sharply higher and pressured financial shares, which are hurt by higher rates.
"I'm slightly disappointed that the (Fed) doesn't see the world in the same light that investors do," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut. The PHLX KBW Bank Index lost 1.5 percent. Recent winners, such as Regions Financial and Marshall & Ilsley, led losers, falling 5.3 percent and 3.4 percent, respectively.
Best Buy stock sank 14.8 percent to $35.52 and pressured the S&P retail index, which fell 0.5 percent. "The data was encouraging overall and shows that retailers are driving traffic into the stores," said Liam Dalton president of Axiom Capital Management Inc in New York, which oversees about $1.4 billion. "But Best Buy is a reminder that there's a lot of discounting and market share being pulled in several directions, meaning it could still be a choppy Christmas season."
The Dow Jones industrial average was up 47.98 points, or 0.42 percent, at 11,476.62. The Standard & Poor's 500 Index was up 1.13 points, or 0.09 percent, at 1,241.59. The Nasdaq Composite Index was up 2.81 points, or 0.11 percent, at 2,627.72. Financial stocks were the top losers on Tuesday, with the group down 0.9 percent, the biggest drop among S&P sectors. Dow component J.P. Morgan Chase & Co lost 1.7 percent to $40.79. Dow component General Electric Co expects its businesses to show solid earnings growth in 2011, with revenue flat to up 5 percent, officials with the largest US conglomerate told investors. The stock rose 0.4 percent to $17.69.
Healthcare stocks were boosted by company news. Medical device maker C.R. Bard Inc rose 4.1 percent to $89.56 after a strong 2011 profit growth outlook, while brokerages gave bullish marks to companies including Amgen and Mylan Inc. Amgen rose 4.9 percent to $56.76 and Mylan added 4.3 percent to $20.68. About 13 stocks rose for every 17 that fell on the New York Stock Exchange, while on the Nasdaq an equal number of stocks rose and fell. About 7.2 billion shares traded on the New York Stock Exchange, the American Stock Exchange and the Nasdaq, well below the year's daily average of 8.61 billion.
Comments
Comments are closed.