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A late-day comeback effort came up short on Tuesday as stocks closed with minor losses amid a stabilizing U.S. dollar.
Today’s Markets
The Dow Jones Industrial Average fell 17.24 points, or 0.16%, to 10433.71, the S&P 500 dropped 0.59 points, or 0.05%, to 1105.65 and the Nasdaq Composite sank 6.83 points, or 0.31%, to 2169.18.The FOX 50 lost 0.42 points, or 0.05%, to 820.21.
While the markets ended firmly in the red, the losses erased just a slice of Monday's 133-point gain and left the Dow fractions of a percentage point away from its highest closing level of the year.
And the markets battled back from a near triple-digit selloff earlier in the day that was caused by a stronger dollar. The action in the currency markets mostly overshadowed a surprise up tick in consumer confidence in November and an upgraded economic forecast from the Federal Reserve.
Most blue-chip stocks ended the day in negative territory, led by Hewlett-Packard (HPQ) and JPMorgan Chase (JPM). The Dow's biggest percentage gainers were telecoms Verizon (VZ) and AT&T (T).
“I think we are still going to see stocks trending higher for the rest of this week and the rest of the year,” Robert Heller of Chapdelaine Brokerage told FOX Business.
Despite a plethora of economic data, trading volume was once again light as Thanksgiving and the end of the year near.
Stocks briefly turned positive after the Fed released the minutes from its early November meeting, which revealed the central bank upgraded its 2009 and 2010 gross domestic product forecasts. Still, the Fed warned the recovery will likely be modest, taking “five or six years” for the economy to get back to full health.
But much of the focus remained on the U.S. dollar, which tends to move in the opposite direction of the market. Basic materials stocks trimmed their losses but closed lower as the greenback flatlined. Still, gold rallied for the 16th time of the last 17 days to another record closing high. Gold gained $1.20 per troy ounce, or 0.10%, to $1165.50.
Energy stocks also pared their losses as crude settled off its worst levels. Crude fell $1.54 a barrel, or 1.99%, to $76.02.
Data Dump
For the most part, the markets shrugged off a deluge of largely upbeat economic data.
The Conference Board said November consumer confidence unexpectedly rose to a 49.5 reading and upwardly revised its October reading. While this is a key reading on sentiment ahead of the holiday season, confidence reports haven’t recently reflected how consumers have continued to spend despite high unemployment. Underscoring the difficult job market, the jobs hard-to-get index rose to the highest level since May 1983.
The U.S. economy grew more slowly than previously estimated, the Commerce Department said in its latest GDP estimate. The government said GDP grew at a 2.8% annualized rate in the third quarter, which was 0.1 percentage points better than economists had expected but down from an earlier estimate for 3.5% growth.
At the same time, the Standard & Poor’s/Case-Shiller home price index rose in September for the fourth-straight month. The group’s 20-city index rose 0.3% from August. The index was down 9.4% from the year before -- the smallest decrease since Dec. 2007.
Corporate Movers
American International Group (AIG) slumped 1% even after The Wall Street Journal reported that federal officials are pressing Kenneth Feinberg, the White House’s pay czar, to ease compensation restrictions for execs at the bailed-out insurer. AIG execs and some officials worry that the salary cuts will spark a mass exodus that could hurt the U.S.’s $180 billion investment in AIG.
General Motors said its sale of Saab to Koenigsegg Group was terminated at the buyer’s request. The bailed-out auto maker said it will take the next several days to assess the situation.
American Eagle (AEO) disclosed a 39% jump in third-quarter net income and said it is “poised for a continued recovery” in 2010, sending the apparel retailer’s stock up 3%. The company’s non-GAAP EPS of 21 cents beat estimates by a penny. Overall, the retailer’s sales fell 1% to $749 million, narrowly exceeding the Street’s view of $748.32 million.
Dollar Tree (DLTR) said its earnings rose 58% to 76 cents a share last quarter, exceeding Wall Street expectations. The discount retailer said its sales rose 12% to $1.25 billion and also forecasted EPS of $1.30 to $1.39 a share, roughly in line with expectations.
Medtronic (MDT) reported a better-than-expected 59% increase in fiscal second-quarter profit and a non-GAAP profit of 77 cents. Analysts had been forecasting a profit of 74 cents a share. The medical device maker also upgraded its full-year earnings guidance.
H.J. Heinz (HNZ) posted an adjusted-profit of 76 cents a share on $2.67 billion in revenue, topping the 69-cent profit and $2.63 billion in revenue that analysts were looking for. The ketchup company also boosted its full-year EPS projection to $2.72 to $2.82.
Zale (ZLC) issued a wider fiscal first-quarter loss of $1.80 a share but analysts had been bracing for an even deeper loss of $2.02 a share. The jeweler’s sales slumped 9.6% to $329.2 million, topping the Street’s view of $319.20 million. Zale said it does not plan to offer the same level of deep discounting this holiday season as it did in 2008.
Hormel Foods (HRL) reported a better-than-expected 53% jump in fiscal fourth-quarter profit. The maker of Spam meat and Chi-Chi’s salsa reported a 10% drop in sales to $1.68 billion, missing estimates. The company also issued a forecast for the full year that would top analysts’ estimates.
Global Markets
European markets closed modestly lower. The U.K.'s FTSE 100 lost 0.59% to 5323.96, France's CAC 40 fell 0.75% to 3784.62 and Germany's DAX dropped 0.55% to 5769.31.
In Asia, Tokyo's Nikkei 225 declined 1.01% to 9401.58, Hong Kong's Hang Seng slid 1.53% to 22423.14 and China's Shanghai Composite dropped 3.45% to 3223.53.
Wall Street’s Comeback Comes Up ShortStocks decline in early morning trading
