Dow, S&P Finish Near Flat, Nasdaq Slides
The Dow and S&P closed near the flat line Wednesday after toggling between small gains and losses for most of the afternoon in light volume trading. The Nasdaq fell, however, as tech stocks dragged on the market.
Stocks started the session off higher by 1 percent, helped by a handful of positive retail earnings and as investors shrugged off signs of growing inflationary pressures .
The Dow Jones Industrial Average squeezed out a gain of 4.28 points to finish at 11,410.21 after flirting with the flat line for most of the afternoon. The blue-chip index gained 124 points in its intraday high and lost 84 during session lows.
Among the Dow stocks, Verizon and AmEx gained, while Hewlett-Packard and Caterpillar lagged.
The S&P 500 eked out a gain of 1.12 points to close at 1,193.88. The tech-heavy Nasdaq fell 11.97 points, or 0.47 percent, to end at 2,511.48.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, ended below 32.
Despite the day's anemic movement, all three major indexes are poised for their best week in almost a month.
“There’s no news today,” said Brian Battle, vice president of trading at Performance Trust Capital Partners. “It’s been a headline driven market and has been for months. There are no headlines today, so we’re enjoying a nice day in the summer doldrums.”
“You’ve got exhaustion on both sides. The sellers sold where they wanted to sell, but the buyers are tired and there’s a lack of conviction,” Warren Meyers, trader at DME Securities told CNBC.
“Money is coming out of treasurys a little bit, but it’s hard to pick an area—financials were up a little bit, but they have a long ways to go off their bottom and the fact that they haven’t recovery much is a negative sign to me," Meyers continued. "That shows there’s still a fair amount of risk in this market.”
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The banking sector has alternated between gains and losses every day since last Monday. Despite being higher for the day, the sector is still down over 15 percent for the year. Many analysts say cautious investors have been driving financials lower based on negative headlines, rather than fundamentals. JPMorgan, Wells Fargo and BofA climbed.
Energy jumped, helped by higher oil prices, even after a government report showed crude stocks gained sharply last week against expectations for a decline. U.S. light, sweet crude climbed above $88 a barrel, while London Brent crude traded above $111. Oil giants ExxonMobil and Chevron all advanced.
Meanwhile, Dell plunged more than 10 percent to lead the S&P 500 sector lower after the tech giant reported disappointing topline growthand slashed its revenue forecast for the year. Analysts were mixed on the stock—BofA Merrill raised its price target on the firm to $18.50 from $18, while RBC cut its price target to $17 from $20.
Rival Hewlett-Packard is scheduled to post earnings after-the-bell Thursday.
Semiconductor companies such as Intel and Micron Tech also traded lower.
Among other earnings, Target gained after the big-box retailer reported a better-than-expected profit, as sales perked up toward the end of the quarter. Rival Costco also gained.
Abercrombie and Fitch declined sharply after the teen clothing retailer beat profit expectations, but warned of troubles as it enters "a period of greater uncertainty." Staples edged higher after the office supply chain also beat earnings expectations, helped by their international business. Oppenheimer raised its price target on Staples to $16 from $15.
And Deere slipped even after the farm equipment maker posted a higher-than-expected profit and raised its full-year earnings forecast.
On the IPO front, shares of Chinese online video firm Tudou plunged over 10 percent in their stock market debut.
Volume was light with the consolidated tape of the NYSE at 3.70 billion shares, while 972 million shares changed hands on the floor.
On the economic front, the producer price index rose 0.4 percent in July, according to the Labor Department, its biggest increase since January. Economists had expected a gain of 0.2 percent, according to a Reuters poll.
Investors will be closely watching for Thursday's consumer price index . Economists expect overall prices to see a monthly gain of 0.3 percent in July.
Weekly mortgage applications gained last weekas interest rates continued to decline, according to the Mortgage Bankers Association.
Gold prices settled above $1,793 an ounce as fears over the euro zone lingered.
European stocks recovered from earlier losses to close at their highest level in more than a week.
On Tuesday, France's Nicholas Sarkozy and Germany's Angela Merkel agreed to float proposals for a tax on financial transactions and as both leaders indicated that the size of the EFSF (European Financial Stability Facility) is sufficient. The two leaders also ruled out issuing Euro bonds to fix the debt crisis.
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Coming Up This Week:
THURSDAY: CPI, jobless claims, existing home sales, Philadelphia Fed survey, leading indicators, money supply, Forest Labs shareholder mtg; Earnings from Sears, Hewlett-Packard and Gap
FRIDAY: Fed's Pianalto speaks, Google IPO anniversary
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