NEW YORK (TheStreet) -- U.S. stocks edged lower on Tuesday following mixed housing market data and signs of a slowing Chinese economy.
The market pared losses through the afternoon, however. The
Dow Jones Industrial Average
fell 69 points, or 0.4%, to close at 13,170. The
lost 4 points, or 0.3%, at 1406, with energy, consumer cyclical stocks, basic materials and transportation leading the losses. Auto makers declined after China began hiking gasoline prices Tuesday.
closed behind by 4.2 points, or 0.1%, at 3074.
both warned of falling Chinese demand for iron ore as China's economy cools. BHP was down 3.3% while Rio Tinto was down 3.5%.
David Joyce, managing director of expansion projects at Rio Tinto, said Tuesday at a conference in Perth, Australia, that while China GDP growth is slowing, the company is confident that the country will see a soft landing with still solid growth for the year. His remarks come after China has already cut its GDP growth forecast for the year to an eight-year low of 7.5%.
China also said that starting on Tuesday it will raise retail gasoline and diesel prices a larger-than-expected 6% to 7%. The increase is the sharpest one in 33 months amid higher oil crude oil prices.
"All indications point to a slightly more aggressive downturn in the Chinese economy," said Mike Zarembski, commodity analyst at optionsXpress. Shanghai copper inventories have risen to well more than double what they averaged the prior quarter, which may cool demand for the commodity in the near term, he explained.
However, Zarembski also noted that the People's Bank of China is expected to ease interest rates and capital requirements in the intermediate future, which could limit the potential downside for risk assets.
Global stocks and commodities were declining following the news out of China. London's FTSE closed down 1.25%, and Germany's DAX was off 1.41%. In Asia, Japan's Nikkei Average settled up 0.12% and Hong Kong's Hang Seng index finished behind by 1.08%.
In the U.S., the Commerce Department reported Tuesday that February housing starts fell to a 698,000 annual pace from an upwardly revised 706,000 clip the previous month. Economists surveyed by
were expecting the number to come in at 700,000. The bureau also reported that building permits for February rose to a notably better than expected 717,000 rate, from 682,000 in January. Economists were expecting building permits to come in at a 690,000 rate.
2012 Stock Predictions and Outlook
"While we believe the recent recovery in housing is real, the single-family category may be challenged in the next few months as the boost from unseasonably mild weather fades," said RBS economists.
In corporate news,
missed analysts' estimates as sales growth fell, hurt by declining sales in Europe and the U.S. The luxury retailer's fourth-quarter net income fell 1.6% to $178.4 million, or $1.39 a share. Analysts had forecast $1.42 a share. However, the retailer announced a higher-than-expected earnings forecast for the year. It expects profit of $4.05 a share for the year ending Jan 31, 2013. Analysts are looking for $3.92. Shares gained 6.7% to $73.27.
Fast food chain
as the second biggest fast-food chain. Wendy's total sales came in at $8.5 billion for 2011, higher than $8.4 billion for its competitor. However,
remains at the top, with sales of $34.2 billion. The numbers are from food consulting firm Technomic. Shares of Wendy's were up 0.4% to $5.05.
, a maker of digital media publishing and marketing applications, posted fiscal first quarter profit in line with analysts' estimates. Adobe posted non-GAAP profit of $284.5 million, or 57 cents a share, on revenue of $1.045 billion. Analysts were expecting earnings of 57 cents a share on revenue of $1.053 billion. For the fiscal second quarter ending in May, Adobe forecast non-GAAP earnings of 57 cents to 61 cents a share on revenue ranging from $1.09 billion to $1.14 billion. The current average analysts' view is for a profit of 60 cents a share on revenue of $1.10 billion. Shares were down 3.9% to $33.16.
May oil futures were down $2.49 to $106.07 a barrel, while April gold futures fell $20.3 to $1,647 an ounce amid a slight uptick in the dollar against a basket of major currencies.
The benchmark 10-year Treasury was down 2/32, lowering the yield to 2.389%, while the U.S. dollar index was up 0.2% at $79.59.
-- Written by Chao Deng and Andrea Tse in New York.
>To contact the writer of this article, click here: