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Stocks mixed in thin trading; oil creeps over US$96
Source: Agencies |
August 29, 2012, Wednesday
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MIXED economic data kept the US stock market hovering near break-even yesterday. One report on home prices looked encouraging, and another on consumer confidence was worrisome.
House prices increased in all major US cities in June, according to the closely watched Standard & Poor's/Case-Shiller home-price index. The report was the latest sign that the housing market has been gaining strength.
"I thought it was terrific," said Phil Orlando, chief equity strategist at Federated Investors. "If you look at all of the key housing metrics over the past year - affordability, building permits, starts - all those numbers are pointing in the right direction."
The Dow Jones industrial average dropped 21.68 points to close at 13,102.99. Hewlett-Packard led the Dow down. HP's stock lost 31 US cents to US$16.90 and hit a new one-year low.
Crude oil crept above US$96 a barrel as Hurricane Isaac picked up speed in the Gulf of Mexico, where roughly one-quarter of the country's oil is produced. Much of the region's production and refining activity has shut down. The National Hurricane Center forecast that Isaac would reach the coast of southeastern Louisiana late yesterday.
In other trading, the Standard & Poor's 500 index slipped 1.14 points to 1,409.30, and the Nasdaq composite index gained 3.95 points to 3,077.14.
Trading was light again, typical for August vacation season. Over the past three days, fewer than 7.7 billion shares have been traded, the lowest three-day stretch since December 2011.
The indexes dipped in morning trading after the Conference Board said its consumer confidence index fell to its lowest point since November 2011. Economists had expected a much higher reading. The index was 60.6, down from 65.4 in July.
That unexpected drop bolsters the case for the Federal Reserve to take more steps to spur economic growth, said Chris Rupkey, chief financial economist at the Bank of Tokyo-Mitsubishi in New York, in a note to clients.
For economists and investors, the big event this week is Chairman Ben Bernanke's speech at an annual conference in Jackson Hole, Wyo. Traders will sift through his speech Friday for evidence the Fed is readying more support.
Anyone hoping to hear Bernanke make a strong case for a third round of bond-buying, known as quantitative easing or QE3, is likely to wind up disappointed, said Russ Koesterich, global chief investment strategist for BlackRock's iShares group. "I don't think those investors are going to find what they're looking for."
Recent reports draw a picture of an economy that's just plodding along, he said. It's hardly in perfect health, but it's not so weak that the Fed will be forced into action at the end of its next meeting on Sept. 13.
"It's not clear there's enough evidence to support QE3 yet," Koesterich said.
Worries over Europe resurfaced following news that one of Spain's largest regions, Catalonia, said it will ask the central government for US$6.3 billion in rescue aid. Catalonia would be the third Spanish region to ask for help.
Borrowing costs for Spain and Italy jumped, and major stock indexes in Europe closed lower. Germany's DAX dropped 0.6 percent, while France's CAC 40 fell 0.9 percent.
House prices increased in all major US cities in June, according to the closely watched Standard & Poor's/Case-Shiller home-price index. The report was the latest sign that the housing market has been gaining strength.
"I thought it was terrific," said Phil Orlando, chief equity strategist at Federated Investors. "If you look at all of the key housing metrics over the past year - affordability, building permits, starts - all those numbers are pointing in the right direction."
The Dow Jones industrial average dropped 21.68 points to close at 13,102.99. Hewlett-Packard led the Dow down. HP's stock lost 31 US cents to US$16.90 and hit a new one-year low.
Crude oil crept above US$96 a barrel as Hurricane Isaac picked up speed in the Gulf of Mexico, where roughly one-quarter of the country's oil is produced. Much of the region's production and refining activity has shut down. The National Hurricane Center forecast that Isaac would reach the coast of southeastern Louisiana late yesterday.
In other trading, the Standard & Poor's 500 index slipped 1.14 points to 1,409.30, and the Nasdaq composite index gained 3.95 points to 3,077.14.
Trading was light again, typical for August vacation season. Over the past three days, fewer than 7.7 billion shares have been traded, the lowest three-day stretch since December 2011.
The indexes dipped in morning trading after the Conference Board said its consumer confidence index fell to its lowest point since November 2011. Economists had expected a much higher reading. The index was 60.6, down from 65.4 in July.
That unexpected drop bolsters the case for the Federal Reserve to take more steps to spur economic growth, said Chris Rupkey, chief financial economist at the Bank of Tokyo-Mitsubishi in New York, in a note to clients.
For economists and investors, the big event this week is Chairman Ben Bernanke's speech at an annual conference in Jackson Hole, Wyo. Traders will sift through his speech Friday for evidence the Fed is readying more support.
Anyone hoping to hear Bernanke make a strong case for a third round of bond-buying, known as quantitative easing or QE3, is likely to wind up disappointed, said Russ Koesterich, global chief investment strategist for BlackRock's iShares group. "I don't think those investors are going to find what they're looking for."
Recent reports draw a picture of an economy that's just plodding along, he said. It's hardly in perfect health, but it's not so weak that the Fed will be forced into action at the end of its next meeting on Sept. 13.
"It's not clear there's enough evidence to support QE3 yet," Koesterich said.
Worries over Europe resurfaced following news that one of Spain's largest regions, Catalonia, said it will ask the central government for US$6.3 billion in rescue aid. Catalonia would be the third Spanish region to ask for help.
Borrowing costs for Spain and Italy jumped, and major stock indexes in Europe closed lower. Germany's DAX dropped 0.6 percent, while France's CAC 40 fell 0.9 percent.
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