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NEW YORK (CNN/Money) -
Stocks were mixed Tuesday as weakness in tech competed with the positive impact of falling oil prices and benign comments from Federal Reserve Chairman Alan Greenspan.
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 (up 12.58 to 10,456.21, Charts) added a few points.
The broader Standard & Poor's 500 (up 0.03 to 1,215.66, Charts) index ended little changed, and the Nasdaq composite (down 5.04 to 2,116.42, Charts) lost 0.2 percent.
Treasury prices edged higher, lowering the corresponding yields. The dollar gained versus other major currencies.
Stocks started mixed as investors welcomed a drop in oil prices but remained edgy in the aftermath of Hurricane Rita. But the tone soon turned negative, following the release of the September consumer confidence report.
The market attempted to rally in the late afternoon as oil prices slipped and Alan Greenspan's afternoon speech proved unsurprising. However, the rally was short-lived, and stocks ended the session mixed.
U.S. light crude oil for November delivery fell 75 cents to settle at $65.07 a barrel on the New York Mercantile Exchange, even as the Gulf of Mexico output remained on hold following Hurricane Rita.
After the close, Affymetrix (up $0.41 to $42.46, Research) warned that third-quarter revenue will miss forecasts, due to manufacturing problems. The company, which makes testing products used for genetic research, saw its shares fall around 10 percent in extended-hours trading.
Wednesday morning brings the August read on durable goods orders, the weekly oil inventory report and earnings from Research in Motion (Research).
Greenspan comments reassure
In the late afternoon, central bank chairman Greenspan delivered prepared remarks about the U.S. economy to an economists' conference in Chicago.
The Fed chief's broad-reaching speech touched on the connections between government and economics in the 20th century, as well as more current concerns, such as the tendency for asset prices to fall after periods of big risk-taking.
He also indirectly addressed the bubble in the housing market, saying that the central bank cannot prevent such bubbles. (To read the speech, click here.)
"There's no real change in the rhetoric," said Michael Darda, chief economist at MKM Partners. "He's talking about risks to economic growth, but within the overall context that monetary policy can respond."
The fact that his speech was unsurprising was in itself supportive to the market.
Earlier in the session, the Conference Board's reading of consumer confidence plunged in September to 86.6 from 105.5 in August, reflecting the impact of Hurricane Katrina. Forecasts were for a slide to 95. (Full story)
"The confidence report really personifies what's going on in consumers' minds right now," said Jack Ablin, chief investment officer at Harris Trust. "Investors are looking at Katrina and Rita as a one-two punch for the economy."
"Thankfully, Rita was not as bad as had been feared, but it really exposed the stresses we have on our oil and gasoline supply system," he added.
What moved?
Chip stocks slumped, weighing on the Nasdaq.
J.P. Morgan downgraded the semiconductor sector to "neutral" from "bullish," noting that gross margins, year-over-year growth rates and earnings-per-share estimates are all likely to peak in the fourth quarter of this year.
The bank also downgraded three chip stocks to "neutral" from "overweight." The three were Cypress Semiconductor (down $0.52 to $14.03, Research), Fairchild Semiconductor International (down $0.92 to $14.43, Research) and ON Semiconductor (down $0.30 to $4.74, Research). All three declined.
The broader chip sector slumped too, with the Philadelphia Semiconductor (down 5.70 to 457.13, Charts) index falling 1.2 percent.
The Dow benefited from gains in select shares, including General Electric (up $0.37 to $33.64, Research) and Philip Morris (up $0.97 to $73.49, Research).
Among Dow gainers, Boeing (up $1.88 to $66.55, Research) rose for a second session after saying Monday it had reached a tentative settlement to end a strike by its largest union.
In merger news, WellPoint (down $0.08 to $75.01, Research) said it was buying WellChoice (up $4.91 to $75.51, Research), the leading health insurer in New York State, for about $6 billion in cash and stock, confirming earlier speculation that it would do so.
Homebuilder Lennar (down $0.07 to $57.00, Research) reported higher quarterly earnings that topped estimates, and boosted its 2005 and 2006 earnings forecast, saying new home sales activity remains strong. But the shares were little changed.
Other homebuilders were weaker, following the morning's surprisingly weak read on new home sales. (Full story)
The Dow Jones Home Construction (down $5.32 to $937.83, Research) index lost 0.6 percent.
Market breadth remained negative. On the New York Stock Exchange, losers beat winners by nine to seven on volume of 1.49 billion shares. On the Nasdaq, decliners edged advancers eight to seven on volume of 1.64 billion shares.
Treasury prices ended slightly lower, lifting the yield on the 10-year note to 4.30 percent from 4.29 percent late Monday. Treasury prices and yields move in opposite directions.
The dollar rose versus the euro and yen.
COMEX gold slumped $3.30 to settle at $466.20 an ounce.
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