|
NEW YORK (CNN/Money) -
Stocks slipped Tuesday, with a profit warning in the homebuilder sector and a rise in oil prices among the factors sparking a retreat after a four-session rally.
As of 5:30 p.m. ET, Nasdaq and S&P futures pointed to a flat open for stocks Wednesday when fair value is taken into account.
The Dow Jones industrial average (down 46.51 to 10,539.72, Charts) lost more than 0.4 percent. The broader S&P 500 (down 4.22 to 1,218.59, Charts) index and the Nasdaq composite (down 6.17 to 2,172.07, Charts) both saw smaller declines.
Treasury prices rallied, lowering the corresponding yields, and the dollar hit a two-year high versus the euro and retreated versus the yen.
A morning profit warning from housing sector leader Toll Brothers likely sparked the session's declines, said Joe Sunderman, market analyst at Schaeffer's Investment Research.
"The housing sector has been hot, and so a slowdown there raises worries about a slowdown in other parts of the economy," Sunderman said.
However, he noted that the session's decline was pretty minimal, given the advance the market has seen since hitting its October lows.
The major gauges had risen for four sessions in a row as part of a broader rebound over the last few weeks. On Monday, falling oil prices had sparked a late-session advance.
The optimism that had fueled the advance seemed to remain in place, but after the rally, stocks were vulnerable to a pullback Tuesday morning.
Looking out beyond the session, stocks remain in a seasonally-favorable time of year, analysts say, and should continue to benefit, as November through January is traditionally a good period for stocks.
"For the rest of the week and the year, I don't expect a big run-up, but I do think we'll be able to drift higher within the current range," said Som Dasgupta, head of equity trading at PNC Financial Services Group.
After the close, Pixar Animation Studios (Research) reported higher quarterly earnings that beat forecasts, sending shares up around 9 percent in extended-hours trading.
Wednesday brings earnings from Federated Department Stores (Research), among others, as well as the September read on wholesale inventories and the weekly oil-inventory report.
What moved?
Toll Brothers (down $5.50 to $33.91, Research), one of the leading homebuilders, slumped 14 percent after warning that 2006 new home deliveries and earnings would likely miss estimates. The warning overshadowed the company's stellar fourth-quarter revenue and earnings.
That weighed on the broader homebuilding sector, sending the Dow Jones Home Construction (down $68.31 to $853.82, Research) index down 7.4 percent.
Freddie Mac (down $0.56 to $60.68, Research) said it is cutting its first-half 2005 profit by $220 million due to what it said were computer-related accounting errors. The government backed mortgage buyer slipped under 1 percent.
Linens 'n Things (down $0.44 to $25.96, Research) agreed to a $1.3 billion buyout by private investment firm Apollo Management. The deal, worth around $28 per share in cash, will take the home-goods retailer private. Shares slipped 1.7 percent.
NetEase.com (down $17.35 to $61.89, Research) slumped 22 percent in unusually active Nasdaq trading after the Chinese online game operator reported third-quarter revenue that missed estimates and forecast that fourth-quarter revenue would be roughly flat with the third.
Among the gainers, oil stocks advanced, lifting the Philadelphia Oil Service (Charts) index by 0.8 percent.
Market breadth was negative. On the New York Stock Exchange, losers topped winners by three to two on volume of 1.40 billion shares. On the Nasdaq, decliners beat advancers by nearly three to two on volume of 1.61 billion shares.
U.S. light crude oil for December delivery rose 24 cents to settle at $59.71 a barrel on the New York Mercantile Exchange. The price of crude had traded on both sides of breakeven throughout the morning.
Treasury prices rallied, lowering the yield on the 10-year note to 4.56 percent from 4.63 percent late Monday. Treasury prices and yields move in opposite directions.
The dollar rallied to hit a two-year high versus the euro and slipped versus the yen.
COMEX gold rose $1.90 to settle at $462.30 an ounce.
|
