Stocks Remain Lower After Home-Sales Miss
Stocks remained lower Wednesday after a disappointing new-home sales report, but didn't add much to its losses.
Stocks started the day lower after Portugal's credit rating was downgraded, accelerating jitters about European debt problems.
Fitch cut its rating on Portugalby one notch to AA- and warned that another downgrade could be on the way.
The dollar roseagainst the euro after the downgrade, which sent commodities prices lower. Oil dropped to near $80 a barrel, while gold was headed toward $1,090 an ounce.
The Dow was down about 20 points in late-morning trading, led by Merck , AT&T and Verizon.
GE and Bank of America were among the handful of gainers.
In this morning's economic news, new-home sales fell 2.2 percent to 308,000, the lowest on record, in February. Economists had expected to see a 1.9-percent increase. Still, the 2.2-percent decline is a much slower pace than the 11.2-percent drop recorded in January.
Orders for durable goods, big-ticket items such as cars and refrigerators, rose 0.5 percentin February as inventories increased by the most since December 2008. It was the third straight monthly increase but fell short of the 0.7-percent gain expected.
And mortgage applications fell for a second straight weeklast week as interest rates crept higher.
This came after Tuesday's rally as investors cheered a better-than-expected report on existing-home sales. All three major indexes hit fresh 1 1/2-year highs.
Kansas City Fed President Hoenig, the lone dissenter in the last Fed meeting, said at a conference this morning that some form of the "Volcker rule," which limits large fiinancial firms' speculative trading, should be included in financial regulation.
Still to come: The Treasury will auction $42 billion in 5-year notes Wednesday, with the results available shortly after 1 pm.
And, it's that time again: The quarter is winding down, so investors are starting to look at first-quarter earnings, which will start rolling out in earnest in a few weeks. Plus, next Friday brings the March employment report; right now, economists expect to see that 107,000 jobs were ADDED to nonfarm payrolls this month.
European stocks slipped after the Portugal downgrade. Investors were also keeping an eye on the UK's pre-election budget for insight into the current government's deficit-cutting plans. Asian stocks ended mostly in the green in the wake of Wall Street's performance.
Bank stocks were mixed — Bank of America and JPMorgan were higher, while Citigroup struggled after its recent rally.
Bank of America shot up more than 2 percent after CEO Brian Moynihan said the company plans to expand in China and elsewhere in Asia. At 1pm, the bank is expected to announce a program to start forgiving mortgage-loan principal for troubled homeowners.
JPMorgan, meanwhile, is close to a deal with the FDIC that could result in a $1.4 billion tax refund, the Wall Street Journal reports.
MF Global shares jumped more than 10 percent following news that Jon Corzine, the former Goldman Sachs CEO and New Jersey governor, was named chairman and CEO of the futures and options broker, which has posted a loss for the last four quarters.
Boeing shares advanced as the Pentagon is considering a multiyear purchase of the company's F-18 fighter planes.
On the earnings front, General Mills fell after the cereal maker reported its earnings rose in the latest quarter and raised its outlook but not by as much as analysts had expected.
Adobe shares jumped more than 4 percent after the software maker
beat on both earnings and sales.
Jabil Circuit tumbled after the electronic-parts maker beat on profit but fell short on sales.
Darden Restaurants was also out with an after-the-bell earnings report, with the owner of Olive Garden and Red Lobster beating consensus forecasts.
Consumer stocks were mostly lower but Starbucks rose after the barista announced its first dividend payout, agreeing to pay shareholders 10 cents a share. The company is holding a shareholders meeting today in Seattle.
Still to Come:
WEDNESDAY: Five-year auction
THURSDAY: Toyota class-action hearing; weekly jobless claims; Fed's Pianalto speaks; seven-year auction; Earnings from Best Buy and Oracle
FRIDAY: Final read on Q4 GDP; consumer sentiment; Fed's Warsh, Bullard speak
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