Stocks Pull Back From Early Rally, Turn Mixed
Stocks pulled back from a morning rally as declines in bank and chipmaker shares offset gains by some retailers and improvement in new claims for unemployment benefits.
Among the earlier Dow gainers were Cisco, JPMorgan and American Express .
Doug Kass, a well-known bear, said that the market has put in a bottom.
"We have reached a low for the market for the year," Kass said on CNBC. "This business is going to be fun again and it's going to happen sooner than most people think."
Financials initially rose after State Street said it expects second-quarter earnings will top analysts' expectations. Shares of State Street jumped 10 percent.
That gave investors some encouragement ahead of the earnings season, which gets underway next week, with reports from Alcoa , Intel , Google , Bank of America , Citigroupand General Electric .
The general take on earnings season has been that the earnings will be decent but the outlooks may disappoint. But Cantor Fitzgerald's Marc Pado said the season may be better than most people think.
"There is some confidence now that there will be more positive surprises than negative during the earnings season," Pado told Reuters.
Citigroup shares rose nearly 3 percent after Rochdale analyst Dick Bove said the stock is a definite "buy" as the "operating businesses of the company have an unusually positive outlook for the future."
European banks rallied, with Deutsche Bank up more than 6 percent and Barclays up nearly 10 percent, as worries about the stress tests eased after Europe named the 91 banks taking part in the tests.
Techs were among the day's other top performers, jumping 4.5 percent.
Kass said if you're anticipating a rebound in the second half — techs are the place to be.
Energy stocks got a boost as oil jumped more than $2, settling at $74.07 a barrel. Massey Energy and Anadarko were among the day's best performers, up more than 7 percent.
BP shares gained 4 percent as CEO Tony Hayward visited Abu Dhabi and has reportedly met with representatives of one of the world's largest sovereign wealth funds. Neither the company nor wealth fund representatives have issued any official comment. BP has been exploring various options to raise cash as it continues to combat the Gulf oil spill.
Retailers were mostly higher ahead of June chain-store sales reports, due out on Thursday. Analysts expect to see a rise of 3.2 percent, according to the latest Thomson Reuters survey, but suggest it may only be a temporary reprieve due to the warm weather and Memorial Day holiday.
Family Dollar retreated after the dollar store reported its profit rose in the latest quarter as cheap stuff remained in demand but its forecast fell short of expectations.
Retailers were among the biggest drags in Tuesday's session after Citigroup slashed its forecast and price targets on a slew of retailers, including Home Depot ,, Macy's and Walmart but raised its rating Family Dollar.
And FTI Consulting tumbled 32 percent to its lowest in more than three years after the global consulting firm slashed their outlook, citing weakness in bankruptcy, restructuring and manufacturing.
Shares of satellite radio provider Sirius XM Radio gained 6.4 percent after the company said it gained more than half a million subscribers in the second quarter, reversing a downward trend.
On the M&A front, Netflix shares jumped 11 percent after striking a deal with Relativity to stream movies the company produces before pay-TV channels get them.
And EMC gained over 5 percent after the company bought privately-held Greenplum, giving it a competitive foothold in the cloud computing space against rivals like Oracle and others.
Volume was average with about 1.3 billion shares changing hands on the New York Stock Exchange. Advancers outpaced decliners, roughly 2 to 1.
Still to Come Week:
THURSDAY: June chain-store sales; weekly jobless claims; consumer credit
FRIDAY: Wholesale trade