Stocks End Mixed as Boeing Drags on Dow
U.S. stocks finished mixed Tuesday as a quick boost from a well-received Treasury auction fizzled and Boeing dragged on the Dow.
The Dow Jones Industrial Average lost 16.10, or 0.2 percent, to close at 8,322.91. The Nasdaq lost nearly 0.1 percent but the S&P 500 eked out a gain of 0.2 percent.
U.S. Treasurys rallied Tuesday as investors positioned themselves ahead of the Federal Reserve's statement, due out Wednesday, and strong demand for the kickoff to this week's record bond auctions.
But for stocks, it was a see-saw day, with any boost or dip quickly fizzling.
Stocks had opened higher, rebounding off of the prior session's hefty selloff, but faltered after a report showed home sales rose but not as much as expected.
Existing-home sales rose 2.4 percentto a 4.77 million annual pace in May, higher than the previous month but less than the 4.81 million rate expected.
"It's good to see some modest gains [in home sales] but it's a bit too early to say that we're seeing the start of a recovery," Gary Thayer, senior economist at Wells Fargo Advisors, told Reuters. "Home prices are still declining and inventory is still high. Those are headwinds that may restrain a recovery in housing."
Several market pros have said recent weakness indicates the market's headed for a correction but several said get read y because the correction won't last long.
"In the short term, this could end up being a more serious correction but what we're advising investors to do is really position themselves into what we think will be a very strong year end," Thomas Lee, chief US equity strategist at JPMorgan, said on CNBC this morning.
Boeing was the biggest drag on the Dow, falling 6.5 precent, after the aerospace giant announced yet another delay for its 787 Dreamliner.
Banks were mostly higher after taking a hit yesterday. Bank of America and JPMorgan gained more than 2 percent.
Bank of America proposed issuing $2.54 billion of common stock in exchange for existing preferred stock, in order to raise the capital required by federal regulators after the "stress test."
But Fifth Third ended lower.
Ford Motor ended up 2.8 percent after a rocky start following news that the automaker will get a government loan to develop fuel-efficient vehicles, part of a $25 billion government program.
General Motors and Chrysler have already received loans from the government; Ford had held out until now.
GM shares skidded another 5 percent amid news that the automaker will cut another 4,000 white-collar jobs by year end.
Apple shares lost 2.5 percent despite news that CEO Steve Jobs has returned to workafter a six-month medical leave. News broke over the weekend that Jobs had a liver transplant two months ago.
FedEx shares rose 1.4 percent after JPMorgan raised its rating on the stock to "overweight" from "neutral."
Starbucks also got an upgrade — Robert W. Baird upgraded the barista's stock to "outperform" — sending its shares up 3.3 percent.
Boston Scientific shares rallied 2.9 percent after the drug maker said one of its heart devices showed promise for slowing the progression of heart failurein a large clinical trial.
The market's focus was on the Federal Reserve today as policymakers began a two-day meeting, which will conclude Wednesday with their latest assessment of the nation's economy.
In its statement tomorrow, the Fed is expected to dampen expectations about any interest-rate hikethis year. It's not expected to indicate any increase in asset purchases beyond its pledge to buy $300 billion of longer-dated U.S. government bonds and $1.45 trillion of mortgage debt.
There was a lot of buzz about whether Ben Bernanke would stay or gowhen his term is up in January. At a press conference today, President Obama refused to answer a question about whether he wanted to the central bank chief to stay in the job.
ExxonMobil and Chevron rose as crude oil jumped nearly $2 to settle at $69.24 a barrel.
Oracle shares fell half a percent ahead of earnings from the software giant, which came out after the closing bell. Oracle beat earnings expectationsas profit margins hit a record and software sales declined less than expected.
Volume was light, with about 1.21 billion shares changing hands on the New York Stock Exchange. Decliners outpaced advancers, roughly 8 to 7.
TUESDAY: Two-day Fed meeting begins; Earnings from Oracle after the bell
WEDNESDAY: Weekly mortgage applications; durable goods; new-home sales; weekly oil inventories; Fed announcement
THURSDAY: Weekly jobless claims; GDP (final); Earnings from Palm
FRIDAY: Personal income/spending; consumer sentiment; Earnings from KBHome
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