Blue Chips Hold Steady, Tech Ticks Up
Updated from 12:26 p.m. EDT
Blue-chip shares settled into a holding pattern Tuesday, though the tech space stayed peppy, as investors kept a close eye on retreating oil prices and dealt with mixed economic and corporate news.
The
Dow Jones Industrial Average
, which was up as much as 76 points this morning, dipped into the red at midday before eking out a 15-point rise at 12,494 as component
General Motors
(GM) - Get Report
kept pressure on the index. The
S&P 500
was down 2 points at 1378. Both were up 0.1%.
The
Nasdaq Composite
managed to stay in the green throughout, however, and recently added 12 points at 2457, thanks in part to strengthening technology stocks such as
Apple
(AAPL) - Get Report
,
Amazon.com
(AMZN) - Get Report
and
(GOOG) - Get Report
.
Equity measures got a bump earlier after the Commerce Department said sales of one-family homes in April jumped 3.3% -- from the prior month's downwardly revised figure -- to a seasonally adjusted annual rate of 526,000. That also represents an 42% drop from last year, but it's a bit better than the economists' consensus of 520,000. Also, the amount of time needed to clear through the current inventory is now estimated at 10.6 months, based on the current sales pace, down from 11 months in March.
On the other hand, prior to that, Standard & Poor's/Case-Shiller indicated that prices of U.S. homes tumbled 14.1% nationwide last quarter, a record decline for the 20-year-old index.
Also, the Conference Board's consumer-confidence numbers showed another decline to 57.2 in May from 62.8 in April -- worse than the measure of 60.0 sought by economists.
Traders were also digesting a
Financial Times
report that former
Federal Reserve
chairman Alan Greenspan believes the probability of a severe recession has "come down markedly," though he still thinks there's a greater than 50% chance the U.S. will fall into some level of recession.
Crude oil continued to lose ground, shedding $2.40 to $129.79 a barrel. That seemed to weigh on the Dow's oil-and-gas components,
Exxon Mobil
(XOM) - Get Report
and
Chevron
(CVX) - Get Report
. Shares were off 0.8% and 1.1%, respectively.
Gold futures were losing $18.40 to $907.40 an ounce. The U.S. dollar firmed by 0.3% against the euro at $1.5724 and tacked on 0.7% against the yen to 104.08.
Back on the companies side,
UBS
(UBS) - Get Report
was among the big decliners, losing 5.9% after officially filing for its previously announced discounted
on Friday. In the prospectus for the deal, the Swiss bank said that it could incur further losses on positions it continues to hold in the mortgage and real estate markets, both in and out of the U.S., having already taken hits on such positions in the past.
Fellow Swiss bank
Credit Suisse
(CS) - Get Report
was off 3% to $50.70.
Elsewhere, a Belgian business paper reported that
InBev
, a beer giant based in Belgium, could start merger negotiations with Budweiser purveyor
Anheuser-Busch
(BUD) - Get Report
as early as today. On Friday, the
Financial Times
said it was preparing a bid worth $46 billion, or $65 a share. Anheuser shares were hugging the flat line following Friday's sizable gains.
Media reports also said
Blackstone
(BX) - Get Report
and Apollo Management are in early-stage talks to take out
Chemtura
(CEM) - Get Report
. Blackstone shares rose 1.9% as Chemtura leaped 8.2%.
At the same time,
Infineon Technologies
(IFX)
fell 4.6% after announcing that CEO Wolfgang Ziebart
has resigned
"due to different opinions on the future strategic orientation of the company." The chip company said Peter Bauer, a member of the management board, will assume the role of spokesman for that body.
Also departing will be the chief of Britain-based
Vodafone
(VOD) - Get Report
, which announced preliminary full-year adjusted operating profit that showed a 5.7% to $19.9 billion on a 14.1% jump in sales. CEO Arun Sarin will step down in July and be replaced by Vittorio Colao. The stock gave up 1.8%.
In the retail sector,
Borders Group
(BGP)
is due to report after the closing bell Tuesday.
As for analyst actions, Bank of America and Bernstein each slashed second-quarter bottom-line estimates for
Lehman Brothers
(LEH)
,
Morgan Stanley
(MS) - Get Report
and
Goldman Sachs
(GS) - Get Report
, with both analysts citing concerns about more writedowns. BofA cut Lehman's target, in particular, to a loss from a prior profit expectation.
Still, Lehman shares shook off early losses to lift by 1.3%, and Morgan stock was up fractionally. Goldman was still off slightly at $172.12.
Also on Tuesday, Citigroup upped
American Axle
(AXL) - Get Report
to buy from hold after Friday's news that striking workers at the company had finally voted to accept an amended employment agreement and go back to work. The three-month strike had idled several General Motors plants, as American Axle is one of GM's main parts suppliers.
GM, on the other hand, was cut to hold from buy at Citi. The automaker said Friday that the strike had cost it $1.8 billion before taxes in the second quarter. Axle shares moved up 1.2% as GM lost 2.8%.
Separately, KeyBanc Capital Markets upgraded oil-and-gas name
Newfield Exploration
(NFX)
to buy from hold, and
Knight Transportation
(KNX) - Get Report
was lifted to outperform at Wachovia. Shares were up 0.5% and 4.1%, respectively.
Treasury prices were falling. The 10-year note was off 17/32 in price to yield 3.91%, and the 30-year bond plunged 1-1/32 in price, yielding 4.64%.
Foreign markets were mixed. The Nikkei 225 in Tokyo bounced 1.5% overnight, and Hong Kong's Hang Seng Index climbed by 0.6%. In Europe, however, the FTSE 100 slipped 0.5% and the Paris Cac surrendered 0.6%. Germany's Xetra Dax tiptoed 0.1% higher.