Stocks mixed as oil ticks higher
Wall Street gyrates along with crude prices; low market volume, mixed housing and economic reports keep stocks within a narrow range.
NEW YORK (CNNMoney.com) -- Stocks ended mixed on Tuesday after Wall Street moved in opposition to crude prices for most of the session and a slew of housing and economic reports left markets at a draw.
Changes in oil prices moved the markets, according to Art Hogan, chief market strategist at Jefferies & Co. When oil prices were at their session lows, Wall Street was up and when oil prices were at their session highs, Wall Street hit its lows, according to Hogan. "The only thing that correlates is the oil prices today."
The Dow Jones industrial average (INDU) ended the day more than 0.2% higher, and the broader Standard & Poor's 500 (SPX) index gained 0.4%. The tech-heavy Nasdaq composite (COMP) fell about 0.2%.
One housing report showed home prices tumbled more than 15% in the second quarter and a government report showed the number of new homes sold in July was still more than 30% behind the same month last year.
Stocks did not react strongly to the negative economic reports because "things are bad, but they are not as bad as expected," said Doug Roberts, Chief Investment Strategist for ChannelCapitalResearch.com. "People are breathing a sigh of relief that these numbers are not as bad as they thought."
"The economic data that came out today was not the market mover that it could have been," said Hogan, because of very low market participation. "We already had the slowest day of the year last week but we might beat it this week."
The last week in August is a popular vacation week for financiers. With trading volume very light, each new piece of economic data moved the market only slightly, said Roberts. Stocks bounced around in positive and then in negative territory without ever moving solidly in either direction.
"You have a lot of guys at the beach operating from their BlackBerries," said Roberts. "Nobody really wants to stick their neck out too far," he said.
Market breadth was positive. On the New York Stock Exchange, advancers beat decliners 2 to 1 on a volume of 856 million shares. On the Nasdaq, advancers beat out decliners by 3 to 2, on a volume of 1.51 billion.
According to Roberts, the only news that could have really put a fire under the lethargic market would have been a massive change in oil prices. "Oil in the short term acts as a tax on the consumer," said Roberts. A sharp decline in energy prices means "a tax break - and that truly does give a material effect" to the consumer.
Financial news: The FDIC, one of the regulators of the nation's banking system, published its second quarter reading on the banking industry and the agency's so-called "problem bank" list grew to 117, up from 90 banks in the first quarter. The number of banks on the "problem list" has increased since Americans started having trouble paying their mortgage payments.
Housing news: The S&P/Case-Shiller report showed that home prices were a record 15.4% lower in the second quarter of 2008 than in the prior year. In addition, the report showed that residential housing prices in its 20-major-cities index fell 15.9% and in its 10-city index, prices fell 17%.
In another read on the housing market, the Office of Federal Housing Enterprise Oversight's (OFHEO) said that its seasonally adjusted purchase-only house price index was 1.4% lower in the second quarter this year than in the first quarter of 2008. Additionally, OFHEO's index was 4.8% lower in the second quarter of 2008 than the same quarter a year prior.
In another grim reading on the housing market, the Commerce Department said sales of new one-family houses were at a seasonally adjusted annual rate of 515,000 in July, up 2.4% from the June rate of 503,000, which had been revised lower. While the July reading ticked up from the prior month, the measure still stands 35.5% below the same month a year ago.
Consumer confidence: The Conference Board said that its reading on consumer confidence increased again in August, after making modest gains in July. The index stood at 56.9, which was higher than the reading of 53 that economists surveyed by Briefing.com had forecast.
Fed minutes: The government released the minutes from its meeting on Aug. 5 of the Federal Open Market Committee when the central bank decided to leave the key interest rate unchanged at 2%.
The Federal Reserve indicated concern over inflationary risks and the ongoing credit crisis in its minutes. "Although downside risks to growth remained, they appeared to have diminished somewhat, and the upside risks to inflation and inflation expectation increased," the minutes said. The minutes indicated that the Fed's next move would most likely be a rate hike. However, given the uncertainty of market conditions, the Fed would not say when the rate increase might be.
Oil and gas: Crude futures for October delivery rose $1.16 to settle at $116.27 a barrel in early trading on growing fears that Hurricane Gustav will interrupt oil supplies from the Gulf of Mexico. Retail gas prices have declined more than 10% since mid-July on the back of declining crude prices. The price of regular unleaded gasoline fell to $3.672 a gallon, according to motor advocacy group AAA's Web site.
Currencies: The greenback gained against the 15-nation euro as Germany, the largest economy in Europe, reported its consumer confidence reading stood at a 5-year low. In addition, rising inflation in the euro zone is further weakening the value of the euro, allowing the dollar to recover. (Full story.)
Bonds, gold: In the bond market, government Treasurys were mixed with the yield on the 10-year benchmark note at 3.78%. Bond prices and yields move in opposite directions.
COMEX gold for December delivery rose $2.40 to $828.10 an ounce. 
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