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Stocks Ease Off Highs in Face of Data

Elizabeth Trotta

Stocks in New York lost some of their early gains Tuesday as investors took in the worst pending home sales data to date and the release of other economic data.

The Dow Jones Industrial Average was down 5.5 points at 8947, and the S&P 500 added 1.1 points at 928. The Nasdaq was rising 9.5 points at 1637.

Wall Street posted an apathetic trading day Monday as updates on U.S. auto sales, Steve Jobs' health, the president elect's stimulus plan, and disgraced investor Bernard Madoff played on the market.

The National Association of Realtors said Tuesday that thepending home sales index declined in the face of job losses and an eroding economy after holding fairly stable for a year. The index, based on contracts signed in November, fell 4% to 82.3 from 85.7 in October, and is 5.3% below a year prior. It's the lowest reading since the series began in 2001, according to the NAR.

"December's housing market activity could be comparably lower due to ongoing problems in the economy, so a real estate-focused stimulus plan is urgently needed," said Lawrence Yun, NAR chief economist.

Meanwhile, the Institute for Supply Management said its December index of non-manufacturing activity, rose to 40.6 from 37.3, four points higher than expected.

The Commerce Department reported that November factory orders fell 4.6%, double the expected decline.

Investors still have an eye out for minutes from the December meeting of the Federal Reserve in which the key benchmark interest rate was to scaled back to a range of zero to 0.25%.

Some of Merrill Lynch's high profile talent is falling between Bank of America's (BAC Quote) fingers days after BofA closed its acquisition, according to reports Tuesday. Bob McCann, who previously led Merrill's retail brokerage has stepped down. The brokerage -- the biggest in the U.S. market, with 16,000 financial advisers and the largest pool of retail investor money on the Street - is considered the primary reason for the acquisition, according to reports by CNBC and MarketWatch.

Domestic automakers aired 30%-plus declines in December sales on Monday, but the problems are global. Foreign automaker Toyota (TM Quote), which itself revealed a 37% decline in U.S. sales, is feeling the strain at home too. On Tuesday, the company said it would suspend production at all 12 of its plants in Japan for 11 days to adjust for the decrease in global demand.

On Tuesday, techies and investors will be watching for new products at Macworld in San Francisco.

In analyst actions, Oppenheimer upgraded Apple(AAPL Quote) to outperform and raised its price target a day after CEO Steve Jobs wrote a "Dear Apple Community" letter on his health, reassuring investors he'd stay at the helm.

Also, Merriman upgraded Google (GOOG Quote) to neutral from sell, while Bernstein, which has an outperform rating, cut its estimates for the company.

In commodities, oil was recently higher by 40 cents at $49.21 a barrel, while gold gave up $10.20 to $847.60 an ounce.

OPEC compliance with supply cuts and the Israeli offensive in Gaza have played into headlines about rising oil prices. But more so is the intensifying gas dispute between Russia and Ukraine. According Reuters, flows of Russian gas through Ukraine to Bulgaria, Turkey, Macedonia, Greece and Croatia have come to a halt. The European Union, which relies heavily on Russia for its gas, is urging resolution.

Longer-term Treasuries continued to fall. The 10-year note was giving up 25/32 to yield 2.6%, and the 30-year note was down 1 20/32, yielding 3.1%. The dollar was stronger against the euro, pound and yen.

Overseas, the FTSE in London and the DAX in Frankfurt were both edging higher Tuesday. In Asia, Japan's Nikkei ended higher and Hong Kong's Hang Seng edged down slightly.