S&P ends at 6-year highMajor gauges manage slim gains as investors digest mixed economic numbers, see-sawing oil prices.NEW YORK (CNNMoney.com) -- Stocks gained Tuesday, with the Standard & Poor's 500 hitting a fresh 6-year high and the Dow Jones industrial average moving closer to a new record close, as investors focused on the positives in the day's mixed economic news. The Dow (up 47.75 to 12,331.60, Charts) rose about 0.4 percent and closed about 11 points below its record high, hit in November. The broader S&P 500 (up 5.64 to 1,414.76, Charts) index added 0.4 percent as well, closing at a six-year high for the second session in a row.
The tech-fueled Nasdaq (up 3.99 to 2,452.38, Charts) composite added a few points and stood not far from its highest level in nearly six years. Treasury prices slipped, raising the corresponding yields and the dollar was mixed versus other major currencies. Oil prices ended little changed after see-sawing all through the session. Stocks managed modest gains throughout the session as investors eyed the day's economic news, including reports that suggested lower wage inflation and surprising strength in the service sector of the economy. A big drop in factory orders, higher Treasury yields and fluctuating oil prices kept a lid on the market's gains, but failed to spark a selloff, with the optimism that has lifted stocks for months remaining in place. After nearly 4 months of gains, investors are still performance chasing, and a lot of money continues to flow into the market, said Curtis Teberg, portfolio manager at the Teberg Fund. "I think we can see more gains through the end of the year, maybe another 1 to 3 percent on the S&P 500," Teberg added. "In January or early February, we might see a little pullback." The next big economic report investors will be focused on is Friday's employment figures for November, which is expected to show a rise in the unemployment rates and payrolls, but a smaller rise in average hourly earnings, the report's inflation component. In terms of the payrolls component, often a market-moving number, "there's a lot of confusion as to what we're looking for," said Art Hogan, chief market analyst at Jefferies & Co. He said an upside surprise that suggests more bullish growth and, by extension, more of a threat of wage inflation would be preferable to a report that shows slower payroll growth. That's because, of late, Wall Streeters have returned their focus to worries about the speed of the economic slowdown. After the close, software maker Novell (Charts) reported that it swung to a fourth-quarter profit from a loss a year ago, but also issued fiscal 2007 revenue guidance in a range that is below analysts' estimates. The fourth-quarter results were preliminary, due to the company's ongoing review of its stock options practices. Shares slipped 9 percent in extended-hours trading. No market-moving economic news is due Wednesday, but investors will be looking for the weekly oil inventory report, due at around 10:30 a.m. ET. Factory orders slide Factory orders fell 4.7 percent in October, after rising a downwardly revised 1.7 percent in September. Economists surveyed by Briefing.com thought orders would fall 4 percent in the month. The Institute for Supply Management's service sector index rose to 58.9 in November from 57.1 in October. Economists thought it would fall to 55.5. A reading above 50 points to growth in the sector. An earlier report showed that third-quarter productivity rose 0.2 percent from an initial read of unchanged, missing economists' forecasts for a rise of 0.5 percent. Unit labor costs, the report's inflation component, rose 2.3 percent from the second quarter, down from the 3.8 percent rise initially reported. That decline took a little edge off concerns about wage-based inflation. On the move Among stock movers, Toll Brothers (up $0.96 to $32.87, Charts) rallied after reporting a sharp drop in fiscal fourth-quarter earnings that nonetheless topped analysts' estimates. The luxury homebuilder forecast a big drop in fiscal 2007 earnings as well, but said that the big slump in the housing sector could be nearing a bottom. (Full story). That boosted D.R. Horton (up $0.34 to $26.63, Charts), Hovnanian (up $1.24 to $37.39, Charts), Lennar (up $1.33 to $53.53, Charts) and other homebuilders, lifting the Philadelphia Housing (up $4.58 to $235.21, Charts) sector index by 2 percent. Grocery chain Kroger (up $1.16 to $23.49, Charts) jumped 5.2 percent in unusually active New York Stock Exchange trading after posting higher quarterly earnings that beat estimates and boosted its 2006 earnings outlook. Coca-Cola (up $1.17 to $48.00, Charts) rose after Merrill Lynch boosted its 2007 and 2008 earnings forecasts on the stock, reflecting what it said was the company's improving fundamentals and potential attractiveness as a defensive play in a slowing economy. Fellow Dow stock Merck (up $0.69 to $45.39, Charts) rose on positive study results for its combination diabetes treatment. Other Dow gainers included Walt Disney (up $0.76 to $34.20, Charts), Boeing (up $1.15 to $90.73, Charts) and AT&T (up $0.44 to $34.68, Charts). Market breadth was positive. On the New York Stock Exchange, winners topped losers five to three on volume of almost 1.54 billion shares. On the Nasdaq, advancers topped decliners by a narrow margin on volume of 2.04 billion shares. U.S. light crude oil prices for January delivery fell a penny to settle at $62.43 a barrel on the New York Mercantile Exchange in a volatile session. Prices rose in early trading then tumbled before midday, only to rebound in the afternoon. Treasury prices slipped, raising the yield on the benchmark 10-year note to 4.44 percent from 4.42 percent late Monday. Bond prices and yields move in opposite directions. In currency trading, the dollar gained versus the euro and trimmed losses versus the yen. COMEX gold fell $3 to settle at $647.90 an ounce. |
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