Stocks waver following earnings report, drop in home prices, rise in consumer confidence

 

Stephen Bernard, AP Business Writer, On Tuesday October 26, 2010

NEW YORK (AP) — Stocks were narrowly mixed Tuesday morning after a rise in consumer confidence offset disappointing news on home prices and earnings.

The Dow Jones industrial average fell 5 points, while broader indexes were mixed. Stocks started the day lower after weak results from Texas Instruments Inc., U.S. Steel Corp. and Bristol-Myers Squibb Co. A better report about consumer confidence in October helped stocks pare their losses in late morning trading.

“The consumer confidence numbers were encouraging,” said Bernie McSherry, vice president of strategic initiatives at Cuttone and Co. It’s a sign shoppers “may be reaching into their wallets heading into the holiday shopping season.”

Ford Motor Co. and Coach Inc. were among the few bright spots in the big batch of earnings reports released Tuesday.

Drugmaker Bristol-Myers Squibb reported a better-than-expected profit, but revenue fell short of forecasts. Sales were hurt by the health care overhaul bill passed earlier this year.

U.S. Steel surprised analysts by reporting a quarterly loss, while chipmaker Texas Instruments said it expects sales to moderate during the fourth quarter because of low consumer demand.

Traders were also moving out of riskier assets as the dollar strengthened. A stronger dollar makes stocks and commodities more expensive because they are priced in dollars. The dollar rose against Japan’s yen and the euro Tuesday. Gold and oil prices fell slightly.

Home prices slid in August, renewing concerns about the health of the housing market. The Standard & Poor’s/Case-Shiller home price index fell 0.2 percent in August. Fifteen of the 20 cities measured in the index saw price declines. The housing market remains very weak and any last lift sales and prices got from a now-expired tax credit appear to be gone.

The Dow fell 4.62, or less than 0.1 percent, to 11,159.43 in late morning trading.

The Dow had been hovering near its highest trading levels of the year over the past few days, but has been unable to maintain upward momentum. Twice in the past three days the Dow has briefly traded above its highest closing level of the year, only to pull back before the end of the day.

The Standard & Poor’s 500 index fell 1.37, or 0.1 percent, to 1,184.25, while the Nasdaq composite index rose 4.18, or 0.2 percent, to 2,495.03.

Gold fell $4.80 to $1,334.10 an ounce. Benchmark crude oil fell 14 cents to $82.38 on the New York Mercantile Exchange.

Disappointing news from European companies like banking giant UBS, wind turbine maker Vestas and steel maker ArcelorMittal drove stocks lower overseas. Britain’s FTSE 100 fell 1 percent and France’s CAC-40 fell 0.7 percent. Germany’s DAX fell 0.5 percent.

Bond prices fell slightly. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.61 percent from 2.56 percent late Monday.

Shares of Bristol-Myers Squibb fell 18 cents to $26.98, while Texas Instruments dropped 45 cents to $28.53. U.S. Steel tumbled $1.63, or 3.9 percent, to $40.64.

UBS shares trading in the U.S. slid 92 cents, or 5.1 percent, to $17.00.

Ford rose 3 cents to $14.18 after it beat expectations and announced plans to accelerate debt repayments. Coach jumped $4.48, or 10.1 percent, to $48.96 after its results indicated affluent shoppers are returning to stores.

Source: Associated Press