Stocks Uneven After Factory Orders Rise, Home Sales Drop
January 06, 2010NEW YORK (AP) -- The stock market zigzagged after reports on factory orders and housing gave mixed signals about the economy.
The modest moves Tuesday came a day after the Dow Jones industrials soared more than 150 points on upbeat manufacturing reports in the U.S. and China.
The Commerce Department reported that factory orders rose by more than twice what had been expected in November, reflecting demand in the steel, computer and chemical industries. The gain of 1.1 percent easily beat the 0.5 percent forecast of analysts polled Thomson Reuters.
Meanwhile, the number of buyers who agreed to purchase previously occupied homes fell sharply in November, an indication that sales will fall this winter. The National Association of Realtors said its index of pending home sales fell 16 percent to 96, the first drop after nine months of gains and the lowest reading since June.
Financial, industrial and consumer discretionary stocks rose, while defensive areas like utilities and consumer staples stocks fell.
“At least for today it indicates some mild bullishness,” said Rick Bensignor, chief market strategist at Execution LLC in New York, referring to gains in riskier parts of the market. “If you really thought the market was not going to be up much higher you would not be putting money into these areas.”
In late morning trading, the Dow industrials fell 20.18, or 0.2 percent, to 10,563.78. The broader Standard & Poor's 500 index rose 1.58, or 0.1 percent, to 1,134.57, while the Nasdaq composite index rose 0.61, or less than 0.1 percent, to 2,309.03.
Bond prices rose, pushing yields lower. The yield on the benchmark 10-year Treasury note fell to 3.78 percent from 3.83 percent late Monday.
The dollar mostly fell against other major currencies, while gold prices rose. Crude oil rose 16 cents to $81.67 a barrel on the New York Mercantile Exchange.
In corporate news, airlines rose after Continental Airlines Inc. and United parent UAL Corp. said Monday that their planes were fuller in December. Continental rose $2.27, or 12.5 percent, to $20.41, while UAL rose $1.29, or 10.1 percent ,to $14.09.
Kraft Foods Inc. said it will revise its hostile takeover offer for British chocolate and gum maker Cadbury PLC, offering more cash funded by the sale of its North American pizza business to Nestle. Kraft rose 94 cents, or 3.4 percent, to $28.37, while Cadbury fell $1.79, or 3.5 percent, to $49.86.
In afternoon trading, Britain's FTSE 100 rose 0.5 percent, Germany's DAX index edged up less than 0.1 percent, and France's CAC-40 advanced 0.3 percent. Japan's Nikkei stock average rose 0.3 percent.