Stocks were trading higher Tuesday after a conflicting batch of economic data, including a slight boost in consumer confidence. Investors remain concerned about the economy's direction, and trading was thin.
The Dow Jones Industrial Average was up more than 50 points, led by Verizon , Caterpillar, JP Morgan . Boeing and Intel fell.
The S&P 500 was up and Nasdaq were higher. Telecoms, financials and materials rose, while technology stocks fell. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 27.
The markets have had a pretty dismal August. Through Monday, the Dow was down nearly 4.4 percent for the month, the worst showing for August since 2001 when it fell 5.5 percent. The Nasdaq was down 6 percent for August and the S&P was down more than 4 percent. On Monday, stocks fell across-the-board on the with the Dow losing 140.92 points to end at 10,009.73. Trading volume on Monday was the lowest of the year on the New York Stock Exchange.
In Tuesday's economic news, a bright spot came from The Conference Board, which reported its Consumer Confidence Index for August was 53.5, from a revised 51.0 in July, and better than the 51.0 forecasted. While positive, the reading is line with consumer confidence a year ago, meaning little has changed in the minds of consumers.
While the consumer confidence figure was "powerful," Jack Ablin, CIO at Harris Private Bank, said renewed consumer confidence won't be enough to boost the economy.
"My concern is that consumers may have a lot of confidence, they just don’t have a lot of money," Ablin said.
His greater concern is CEOs don't have much confidence. According to Ablin, CEO confidence is at the same level it was in the first quarter of 2008, at the beginning of the financial crisis.
Shares of luxury-retailer Saks soared more than 20 percent after a rumor originating in a British newspaper said a group of private equity firms may bid for the company.
Monsanto fell after reporting an earnings estimate for the year that fell below analysts' expectations. The maker of RoundUp and other agricultural pesticides said earnings for this fiscal year will be about $2.40 to $2.45 a share, lower than the its previous estimate of $2.40 to $2.60 a share.
Shares of H.J. Heinz are modestly higher after news its quarterly profits will rise 10 percent, thanks to a growth in sales in emerging markets. The food products company said earnings will be 75 cents a share in the fiscal first quarter ended July 28, better than the 73 cents a share forecast by analysts.
In company news, S&P downgraded shares of Dell to sell from hold. The firm is concerned Dell will bid higher for 3Par to boost its data-center product line-up. Dell is, however, reportedly planning to drop out of the bidding for3Par in the wake of Hewlett-Packard's higher bid. Dell has until Wednesday to match HP's $30 per share offer.
And a study has shown that an experimental drug from Bristol-Myers Squibb and Pfizer is shown to reduce the risk of stroke by more than half compared with aspirin. Bristol-Myers also got a boost from the brokerage firm Jefferies, which raised the company's shares to a rating of "buy" "from "hold."
Shares of Deere were higher after the company said it would sell its wind power business for about $860 million to Exelon , the electric utility company.
In the technology sector, Google is set to roll out a major update to its Gmail service, which will include a new "priority inbox" to separate a user's more important e-mail from other messages.
Elsewhere in economic news, another positive sign came from the Federal Deposit Insurance Corporation, which announced fewer U.S. loans were 90 days or more past duein the second quarter, the first decline seen in more than four years.
The S&P/Case Shiller composite index of 20 metropolitan areas rose 0.3 percent in Junefrom May on a seasonally adjusted basis. The rise was better than the 0.2 percent increase expected by economists polled by Reuters, though slower than the 0.5 percent rise in May.
The bleaker news came from a reading of business activity in the Midwest, where The Chicago Purchasing Managers index came in at 56.7, a low level for the year, and weaker than the 57.6 expected for August. The index was 62.3 in July.
At 2 p.m., the Federal Reserve releases the minutes of the most recent Federal Open Market Committee meeting.
In other news, Hurricane Earl is now a Category Four storm with leisure travelers likely to be affected based on Earl's current track. Major cruise lines have already rerouted ships, skipping or changing stops to avoid the storm's path, and the airlines are making plans for possible flight disruptions.
On Tap This Week:
TUESDAY: FOMC minutes
WEDNESDAY: August auto sales; weekly mortgage applications; Challenger job-cut report; ADP employment report; ISM mfg index; construction spending; weekly oil inventories; Fed's Fisher speaks; Apple event THURSDAY: August chain store sales; weekly jobless claims; productivity and costs; factory orders; pending home sales FRIDAY: August jobs report; Fed's Lockhart speaks; ISM services index
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