Markets weather disappointing news
NEW YORK – Wall Street paused after a huge two-session rally Tuesday but closed mostly higher, holding on to almost all its gains even after disappointing reports on consumer sentiment and the housing market.
Stocks pulled past profit-taking that was due in part to the Conference Board’s report that consumer confidence sank to a five-year low in March.
The index has been weakening since July, and is closely watched to determine the future of consumer spending, perhaps the most critical part of the economy.
Meanwhile, the Standard & Poor’s/Case-Shiller home price index indicated that U.S. home prices fell 11.4 percent in January, the steepest drop since data was first collected in 1987. The latest decline means prices have been growing more slowly or dropping for 19 consecutive months.
Volume was light, with many investors holding off any big moves while the market sought a direction; trading remained uneasy amid the ongoing uncertainty about the economy and credit markets.
Still, the fact that stocks didn’t suffer a huge pullback, which has been the market’s pattern for months after a big gain, indicated that at least for the time being Wall Street seems more capable of handling bad news.
Stocks had charged higher in the days following the Federal Reserve’s decision to aid investment banks and orchestrate a buyout deal for a near-collapsed Bear Stearns Cos. The Dow Jones industrials shot up nearly 450 points in the previous two sessions.
The Dow fell 16.04, or 0.13 percent, to 12,532.60.
The blue chip index was actually the laggard in Tuesday’s session – the broader Standard & Poor’s 500 and Nasdaq composite indexes had more robust gains. The S&P rose 3.11, or 0.23 percent, to 1,352.99; the Nasdaq added 14.30, or 0.61 percent, to 2,341.05.
Investors overseas remained upbeat following the U.S. rallies Monday and last week. Japan’s Nikkei stock average finished up 2.12 percent. Britain’s FTSE 100 fell 0.91 percent, Germany’s DAX index rose 3.24 percent, and France’s CAC-40 rose 3.49 percent.