NEW YORK (CNN/Money) -
The major stock indexes closed little changed Tuesday, despite a late-session rally attempt, as investors stayed cautious after the morning's upbeat economic reports and ahead of Wednesday's spate of economic news.
The Dow Jones industrial average (up 16.15 to 9763.94, Charts) and the Standard & Poor's 500 (up 1.81 to 1053.89, Charts) index both gained just under 0.2 percent, while the Nasdaq composite (down 4.10 to 1943.04, Charts) lost about 0.2 percent.
Due to a holiday-shortened trading week, all of the economic reports that would normally be spread out between Wednesday and Friday are all being released Wednesday.
Wednesday brings around nine economic reports, including weekly jobless claims, durable goods orders for October, personal income and spending for October, and the University of Michigan's revised reading of its consumer sentiment index for November, all anticipated before the bell. After trading begins, the Chicago Purchasing Manager's index, a regional manufacturing read, is expected.
"There's an unbelievable number of reports coming out, any number of which could move us one way or the other," said Art Hogan, chief market analyst at Jefferies & Co.. "If we have a blowup in the jobless claims, and it goes above 400,000, if the consumer sentiment number doesn't confirm today's consumer confidence number, you could see some selling."
Stock markets will be closed Thursday for the Thanksgiving holiday, and will close early, at 1:00 p.m. ET, Friday.
The Treasury bond market will close early the day before Thanksgiving, will remain closed Thanksgiving Day, and will close early again the day after. Commodities markets will close early the day before Thanksgiving and will remain closed on the holiday Thursday and also Friday.
The week of Thanksgiving is often a good one for the market, said Donald Selkin, director of research at Joseph Stevens, "but even if we don't do much this week, or see a little selling, the internals of the market look pretty good right now, the trend remains pretty positive."
Stocks surged Monday in something of a relief rally, with the major indexes bouncing back after two weeks of selling. Analysts said the gains were partly in response to a recovery in the dollar and partly in a show of optimism ahead of the economic news due out later in the week.
As a result, the release of the actual news Tuesday provoked little response. Gross domestic product grew at a faster-than-expected 8.2 percent rate in the third quarter, up from an initial reading of 7.2 percent and a second-quarter reading of 3.3 percent. It was the fastest pace of growth since the first quarter of 1984 and well above the 7.6 percent economists surveyed by Briefing.com had expected.
The November read on consumer confidence, released shortly after the start of trade Tuesday, soared to 91.7 against expectations for a rise to 85.0 from 81.1 last month. However, existing home sales in October showed a bigger-than-expected decline.
Dow 30 component Caterpillar (CAT: up $1.70 to $75.04, Research, Estimates) gained 2.3 percent and was the average's best performer on the session. In a morning note, Bear Stearns upgraded the machinery sector to "market overweight," based on expectations for a capital spending recovery in the first half of 2004, which should result in higher equipment sales. The brokerage also reiterated its "outperform" rating on Caterpillar.
Dow 30 company Citigroup (C: up $0.17 to $46.91, Research, Estimates) said late Monday it will buy the consumer finance unit of Washington Mutual (WM: down $1.60 to $44.95, Research, Estimates) for $1.25 billion, building on its consumer lending business. Citigroup's stock was little changed by the close, while Washington Mutual tumbled 3.4 percent.
A pair of brokerage upgrades boosted shares of Xerox (XRX: up $0.82 to $11.44, Research, Estimates) Tuesday, enabling the copier stock to gain 7.7 percent in active NYSE trade after sliding Monday. On Monday, the company gave a 2003 and 2004 earnings-per-share forecast that was seen as upbeat, but was nonetheless short of current Wall Street estimates. However, Lehman Bros. Tuesday upgraded the stock to "equal weight" from "underweight" and Merrill Lynch upgraded it to "buy" from "neutral," in a show of optimism about the company's growth prospects, particularly in 2005 and beyond.
Shares of Dow component Merck (MRK: down $0.67 to $41.42, Research, Estimates) lost 1.6 percent in a broad pullback for the drug and pharmaceutical sector after Monday's run, as well as in response to a somewhat bearish analyst note out of Credit Suisse First Boston. CSFB cut its 2004 earnings-per-share forecast on Merck to a profit of $3.14 from an earlier forecast of $3.20, pointing to weak growth in certain core product lines and a belief that the company will be spending more next year on research and development.
Almost 11 stocks rose for every five that fell on the New York Stock Exchange, where 1.32 billion shares traded, while more than nine stocks gained for every seven that declined on the Nasdaq, where 1.80 billion shares changed hands.
Treasury prices gained, pushing the yield on the 10-year note down to 4.19 percent from 4.23 percent late Monday. Bond prices and yields move in opposite directions.
The dollar continued to gain versus the euro and the yen. The U.S. currency rallied Monday after hitting an all-time low against the euro and a three-year low versus the yen last week.
NYMEX light sweet crude oil futures added 3 cents to settle at $29.77 a barrel. COMEX gold fell 30 cents to settle at $392.40 an ounce.