NEW YORK (CNNMoney) -- Investors are on edge as they face a series of headwinds that just don't seem to be going away: a slowing U.S. recovery, European debt problems and the end of the Federal Reserve's bond-buying program.
All of that means that "gains will be harder to come by," warned Bob Doll, BlackRock chief equity strategist, in a recent client note. On the bright side, the uptrend will continue, "but at a more challenged pace," he added.
It's already been a choppy week and it's only Tuesday. After getting hammered in the previous session, stocks were struggling to recover.
The Dow Jones industrial average (INDU) slipped 25 points, or 0.2%, with GE (GE, Fortune 500) and American Express (AXP, Fortune 500) pressuring the blue chip index. Chevron (CVX, Fortune 500) and Exxon Mobil (XOM, Fortune 500), which got a boost from oil prices, were among the biggest gainers on the Dow.
Crude prices rose nearly 2% to close just under $100 a barrel. The spike came after Goldman Sachs boosted its forecast for Brent oil -- the European benchmark -- to $120 a barrel by year's end.
The Nasdaq Composite (COMP) lost 13 points, or 0.5%, and the S&P 500 (SPX) lost 1 point, or 0.1%.
May has been especially rough for the stock market. The Dow and S&P 500 have both lost more than 3%, and the Nasdaq has tumbled 4% since the start of the month.
"The recently weaker tone in equity markets can be attributed to a broad slowdown in economic data," Doll said. "Outside of the United States, investors remain focused on the sovereign debt problems plaguing Europe."
Rating agencies Standard and Poor's and Fitch have issued pessimistic outlooks for Greece, Italy and Belgium during the last few days.
"Europe's debt problems are like a hurricane off the coast," said Jack Ablin, chief investment officer at Harris Private Bank. "We know it's coming, and now we want to know how much damage it will ultimately inflict."
On top of that, investors are also preparing for the conclusion of the Fed's bond buying program in June, which some experts say has been the prominent driver in the stock market's gains since Ben Bernanke first mentioned it last August.
While the risks may put a lid on gains in the near-term, investor's don't need to worry about an end to the two-year old bull market. Stocks have doubled from their March 2009 lows -- at a record pace.
And for the year, stocks remain in positive territory: The Dow is up nearly 7% while the S&P 500 and Nasdaq are about 4% higher.
Economy: A government report showed that new home sales rose 7.3% to an annual rate of 323,000 units in April. Economists were expecting an annual rate of 300,000 sales for April.
Companies: AutoZone (AZO, Fortune 500) was among the S&P 500's best performers. Shares of the auto parts retailer jumped 6% after the company delivered quarterly earnings and sales above expectations.
Shares of entertainment products maker Sony (SNE) rebounded, ticking up 5%. Shares slipped nearly 4% in the previous session following disappointing quarterly results due to the earthquake and tsunami in Japan.
Russian search giant Yandex (YNDX) debuted on the Nasdaq under the ticker 'YNDX' after going public late Monday. The stock jumped almost 60% from its IPO price of $25 a share.
Currencies and commodities: The dollar slid against the euro, the British pound, and the Japanese yen
Gold futures for June delivery rose $7.90 to $1,523.30 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury rose slightly, pushing the yield down to 3.12% from 3.13% late Monday.
World markets: After global markets sank in the previous session on concerns that eurozone debt woes will continue to spread, European stocks rebounded in Tuesday. Britain's FTSE 100 and the DAX in Germany added 0.4% and France's CAC 40 rose 0.3%.
Asian markets ended mixed. The Shanghai Composite edged lower 0.3%, while the Hang Seng in Hong Kong ticked up 0.1% and Japan's Nikkei rose 0.2%.
Index | Last | Change | % Change |
---|---|---|---|
Dow | 32,627.97 | -234.33 | -0.71% |
Nasdaq | 13,215.24 | 99.07 | 0.76% |
S&P 500 | 3,913.10 | -2.36 | -0.06% |
Treasuries | 1.73 | 0.00 | 0.12% |
Company | Price | Change | % Change |
---|---|---|---|
Ford Motor Co | 8.29 | 0.05 | 0.61% |
Advanced Micro Devic... | 54.59 | 0.70 | 1.30% |
Cisco Systems Inc | 47.49 | -2.44 | -4.89% |
General Electric Co | 13.00 | -0.16 | -1.22% |
Kraft Heinz Co | 27.84 | -2.20 | -7.32% |
Overnight Avg Rate | Latest | Change | Last Week |
---|---|---|---|
30 yr fixed | 3.80% | 3.88% | |
15 yr fixed | 3.20% | 3.23% | |
5/1 ARM | 3.84% | 3.88% | |
30 yr refi | 3.82% | 3.93% | |
15 yr refi | 3.20% | 3.23% |
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