Updated with Treasuries, stock and commodity prices
Oil extended its losses, and the major stock indices in New York closed up to 2% lower Tuesday despite a string of tech and energy upgrades ahead of the start of earnings season.
Dow Jones Industrial Average
fell 161.27 points, or 1.9%, to 8163.60, while the
lost 17.7 points, or 2%, to 881.03. The
declined 41.23 points, or 2.3%, to 1746.17.
gained 1.6% a day before its earnings release. But industrials
were 3% to 5% lower amid broad, cross-sector losses.
Economic recovery jitters, namely the discouraging jobs report from late last week, tugged at markets early Monday but were stifled by late-day buying and a report on the service sector. While no economic data were slated for Tuesday, those same concerns resurfaced as the steady roll of earnings neared and more people returned from the holiday weekend.
"While in June we had some difficult numbers that came out, we don't think that's derailing this recovery," said Burt White, chief investment officer at LPL Financial. "We think that the bad weather
after the really positive news that came out in May probably caused a little bit of a hiccup in June. The economy doesn't recover in a straight line; you're going to have these little blips and we think that's normal."(Click below for my entire conversation with Burt White on the economy and the markets, including areas he sees as opportunities.)
Overall declines muffled a slew of analyst upgrades in the tech and energy spaces that sent some names higher. Those included
were also upgraded.
Meanwhile, the U.S. Energy Information Administration again increased its forecast for world oil demand for 2009, now expecting demand of 83.85 million barrels per day, up from 83.68 million barrels a day.
Crude oil futures nonetheless extended losses Tuesday, falling $1.12 to $62.93 a barrel.
"My experience has been that when 'days in storage' rose above 55 days, prices of crude oil tended to weaken," writes Vince Farrell, chief investment officer at Soleil Securities. "The current storage is a touch over 62 days."
While OPEC has been more disciplined in production cutbacks, Farrell says the recent strength in the price, barring the last few days, has been due more to the thought that economic recovery was close at hand. "I think the recovery will come," writes Farrell, "but not today."
The head of the Commodity Futures Trading Commission said Tuesday that regulators will consider whether the government should
on the number of futures contracts in oil and other energy commodities held by speculative traders,
The Associated Press
reports. The move comes amid complaints that funds traded on exchanges have pumped billions of dollars into energy commodities, artificially propping up prices.
Earnings begin this week with
kicking things off for the Dow Jones Industrial Average on Wednesday after the close. Things won't get into full swing until next week, however, when
Bank of America
, among others, report.
In other news, the
Pre handset will be available exclusively in the U.K., Ireland and Germany on
O2 network and on its Movistar network in Spain in time for the holiday season. Telefonica's U.K. mobile phone business is also the exclusive U.K. carrier for
Telefonica shares were down 2.2% Tuesday, while Palm lost 2.6%.
Elsewhere, automotive parts supplier
filed for bankruptcy protection Tuesday, having received support from its bank lenders and bondholders to move forward with its previously announced debt restructuring plan.
executives will meet with German officials on Tuesday to discuss competing offers for its Opel subsidiary,
Earlier in the week, a federal bankruptcy judge also approved the U.S. automaker's
to a new company, effectively clearing the way for it to emerge from bankruptcy.
Stocks overseas were mixed Tuesday. In Europe, London's FTSE 100 and the DAX in Frankfurt trailed 0.2% and 1.2%, respectively. In Asia, the Nikkei in Japan and the Hang Seng in Hong Kong closed lower by 0.3% and 0.7%, respectively.
Longer-dated Treasuries were recently rising in price, falling in yield. The 10-year was up 14/32 to yield 3.45%, while the 30-year added 29/32, yielding 4.3%.
The dollar was recently gaining strength against the pound, euro and yen, while gold edged up $2 to $929.80 an ounce.