Stocks Move Off Lows And Turn Mixed

Stocks moved off their lows and turned mixed, helped by a smaller-than-expected decline in October pending-homes sales and a rally in big-cap tech shares.

The Nasdaq pushed into positive territory, the Dow and S&P 500 remained lower following disappointing corporate outlooks.

Pending US home sales slipped 0.7% in October, less than expected, the National Association of Realtors said.

Many investors hoped the rally of the past two sessions, which saw the Dow gain more than 500 points,would be the start of a sharp Santa rally, but high levels of volatility kept market participants fearful of further declines.

"If we just get some sideways action for a little bit of time here then as we go into 2009 that will be a good time to jump back into stocks," Rob Morgan, president of Dearden, Maguire, Weaver, and Barrett, told "Worldwide Exchange."

On the economic front, President-elect Barack Obama is advocating increased infrastructure spending to aid job creation and stimulate the country's economy, which helped boost the early-week rally.

However, both FedEx and Texas Instruments cut their profit forecasts after the bell Monday, which weighed on the market, along with persistent doubt over the future of the Big Three auto makers.

FedEx shares lost more than 10 percent, making it the biggest decliner on the S&P 500.

Rival package-delivery service UPS also fell sharply.

Negotiators tried to finalize short-term loans for auto makers, to stave off liquidity issues and avert bankruptcy. The loans, which could run to $15 billion of government money, would be given on the guarantee of an industry overhaul.

But shares of General Motors and Ford declined — with GM being one of the biggest drags on the Dow — after both stocks rallied more than 20 percent on Monday.

American depositary shares of Sony rose after the television and gadget maker reported plans to slash 16,000 jobsfrom its payrolls and cut costs.

This Week:

WEDNESDAY: Weekly mortgage applications; wholesale trade; weekly crude inventories; House hearing on TARP; Treasury budget
THURSDAY: Two-day European economic summit begins; Import/export prices; trade deficit; weekly jobless claims; weekly natural gas inventories; Fed's Stern speaks; Earnings from Ciena, Costco
FRIDAY: PPI; retail sales; consumer sentiment; business inventories

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