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- Senator introduces bill for I-57 that would connect Sikeston with Little Rock (04/28/16)4
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Stocks mixed following IBM downgrade, some profit taking
AP Business WriterNEW YORK (AP) -- Wall Street waffled Tuesday as a revenue downgrade for IBM reminded the market that the economic recovery isn't assured yet. Stocks closed narrowly mixed, having fluctuated throughout the session as investors cashed in some profits from Monday's big rally.
The news on IBM was offset somewhat by an upbeat housing report. Analysts said investors who felt more optimistic about a business recovery on Monday were now less willing to commit to stocks until the rebound in earnings and the economy is a sure bet.
"Most of our customers are waiting for a time when they feel more confident about doing something," said Philip S. Dow, managing director of equity strategy at Dain Rauscher Wessels in Minneapolis.
After shifting between gains and losses through the day, the Dow Jones industrial average closed up 18.70, or 0.2 percent, at 9,706.12. The advance was slight compared with a 213-point surge Monday when the Dow claimed its biggest daily point gain since May 8, when it rose 305.28.
Broader indicators were mixed. The Standard & Poor's 500 index inched up 0.94, or 0.1 percent, at 1,037.11, having climbed nearly 29 Monday -- its best daily advance since May 8, when it rose 39.36.
The Nasdaq composite index declined 10.52, or 0.7 percent, to 1,542.77, having risen 48.55 Monday to achieve its best one-day gain since rising 66.51 on May 14.
Analysts said the market's fluctuations also had to do with its efforts to find a normal trading range following more erratic sessions -- Monday's rally and big losses last week, when the Dow had two triple-digit declines.
"The market is trying to stabilize here by not trading as volatile as it has been," said Steven Goldman, chief market strategist with Weeden & Co. in Greenwich, Conn.
Investors were encouraged by a report from the Commerce Department that said housing construction rose 11.6 percent in May, the largest increase since July 1995.
Homebuilders advanced on the housing news. Lennar rose $1.80 to $57.30.
But Dow industrial IBM was a big weak spot, falling $1.20 to $75.94 after Morgan Stanley lowered its revenue outlook for the second quarter as well as 2002 and 2003.
Overall, tech stocks were mixed. Intel fell 54 cents to $22.02, while Microsoft rose 31 cents to $55.99.
Investors punished companies that said profits continue to languish. Retailer Best Buy sank $2.51 to $39.75 on a second-quarter earnings warning.
But The New York Times Co. rose 88 cents to $50.79 after saying tight cost control measures would allow it to post results at the high end of its estimates.
The market was uninspired by the Labor Department's report that consumer prices were flat in May. That was the best showing in inflation in five months and an improvement over April's 0.5 percent increase.
Still, analysts said the market's lackluster performance on Tuesday wasn't surprising given the strides the market made Monday following four weeks of selling on concerns about earnings, the economy and conflicts overseas.
Advancing issues narrowly outnumbered decliners 16 to 15 on the New York Stock Exchange. Volume was light at 1.18 million shares, below Monday's 1.23 million.
The Russell 2000 index, the barometer of smaller company stocks, fell 1.03, or 0.2 percent, to 469.71.
Overseas, Japan's Nikkei stock average finished Tuesday up 1.7 percent. In Europe, France's CAC-40 slipped 0.1 percent, Britain's FTSE 100 declined 1.2 percent, and Germany's DAX index fell 0.9 percent.
On the Net:
New York Stock Exchange: http://www.nyse.com
Nasdaq Stock Market: http://www.nasdaq.com