Updated from 4:18 p.m. EST
The major averages had a strong start but lost momentum late and closed lower Tuesday, as losses in tech names such as
offset a rise in commodity stocks.
Dow Jones Industrial Average
fell 10.99 points, or 0.09%, to 12,337.22. The Dow swung in a range of 201 points, having climbed as many as 157 points shortly after the opening bell before squandering its gains.
Before the open,
Bank of America
as components on the Dow. Bank of America edged lower, while Chevron rose.
was down 1.21 points, or 0.09%, to 1348.78. After spending most of the session in positive territory, the
pulled back and dropped 15.60 points, or 0.67%, to 2306.20.
"While the 'oversold' condition has generally be cleared, volume has not picked up much on the rallies, nor has any significant prior peak been cleared that may indicate a strong interest in buying stocks," said Paul Nolte, director of investments with Hinsdale Associates. "The markets are modestly better compared to January, but remain a treacherous place to be."
Energy-related stocks were strong amid a jump in commodity prices. Crude oil settled at $100.01 a barrel, its highest ever close, after soaring more than $4 for the day. Gold futures advanced $23.70 to $929.80 an ounce.
Chevron climbed 1.5% to $84.83, and
rose 1.9% to $87.01. Miners
added 5.1% and 5.4%, respectively.
"The bottom line is that we closed well off the session highs, and that's a disappointment," said Robert Pavlik, chief investment officer with Oaktree Asset Management. "The rise in commodity prices benefits some stocks, but it raises fears of inflation and takes away the chance of further rate cuts. The market turn lower corresponded with the close of oil, so we have to attribute much of this pullback to that."
Breadth was mixed to start the week. About 3.46 billion shares changed hands on the
New York Stock Exchange
, with advancers beating decliners by a 10-to-7 margin. Volume on the Nasdaq reached 1.91 billion shares as losers edged winners 15 to 14.
U.S. markets were closed Monday for Presidents' Day.
"Not only is this a holiday-shortened week, but the economic calendar is pretty light," said Marc Pado, U.S. market strategist with Cantor Fitzgerald. "This is a perfect week to anticipate more consolidation, light volume, moderate breadth, and a further technical base-building."
Traders also were monitoring several developments on the financial front. According to a report in
The Wall Street Journal
, bond insurer
is close to finalizing a plan that would raise $2 billion in capital. The move would help Ambac maintain its triple-A rating, ensuring the ability to write new business. Ambac was off 28 cents, or 2.7%, to close at $9.94.
said CEO Gary Dunton has resigned and former chief Jay Brown will return to the position. Shares fell 54 cents, or 4.4%, to $11.70.
Also in the financial sector,
fell $2.66, or 5.2%, to $48.22 after disclosing that it had overvalued its holdings in asset-backed securities by nearly $3 billion.
The start of the trading week also brought a fresh batch of earnings reports.
posted adjusted an fiscal fourth-quarter profit of $1.04 a share, 2 cents ahead of expectations. The company also reported more than $100 billion in net sales for the quarter, a first in retailing.
Although the retail giant's full-year 2008 outlook allowed for downside to analysts' expectations, shares finished up 22 cents, or 0.4%, to $49.66.
In other profit reports,
Martha Stewart Living
fell short of the Thomson First Call average estimate, even as earnings doubled from a year ago. The company also said it has agreed to buy a 40% stake in wedding planning Internet site WeddingWire and has bought the rights to the Emeril Lagasse's cookbooks, television shows and kitchen products.
Shares of Martha Stewart surged $1.06, or 17.3%, to $7.19.
Medco Health Solutions
topped earnings expectations for the most recent quarter.
beat on an adjusted basis. All three ended the day higher.
Away from earnings, shares of
Delta Air Lines
lost 3.2%, and
finished 1.3% lower, after
The Wall Street Journal
said merger talks could lead to a deal soon. The potential merger would create the largest air carrier in the world.
On the geopolitical front, Fidel Castro has resigned as president and military leader of Cuba at the age of 81. The move ends Castro's 49-year reign as leader of the country.
Treasury prices were tumbling. The 10-year note was down 1-1/32 in price to yield 3.90%. The 30-year bond was falling 1-17/32 in price, yielding 4.67%.
Overseas markets were mostly higher. Hong Kong's Hang Seng added 1.5%, and Japan's Nikkei 225 tacked on 0.5%. Among European bourses, London's FTSE 100 was up 0.3% and Germany's Xetra Dax rose 0.5%.