Stocks close mostly down in ‘nervous’ trading day
Nov. 5, 2013 at 4:14 PM ET
Stocks closed mostly lower on Tuesday, with Wall Street pausing after a two-session rise, as data showing the services industry expanded more-than-expected in October offset softer economic headlines from Europe.
“When the market gets to these levels, near all-time highs, it’s almost like the whole market is saying, ‘when is the next shoe going to drop?’ so I just think it’s nervous trade,” said JJ Kinahan, chief strategist at TD Ameritrade.
Just over a half-dozen points from its record close a week ago, the S&P 500 also closed with a slight loss, with telecommunications and energy the top laggards and consumer staples and technology the best performers of its 10 major industry groups. The Nasdaq gained 3 points.
For every share rising, more than two fell on the New York Stock Exchange.
The CBOE Volatility Index (VIX), a measure of investor uncertainty, held steady just above 13.
The dollar gained against the currencies of major U.S. trading partners, while the yield on the 10-year Treasury note used to figure mortgage rates and other consumer loans rose 6 basis points to 2.66 percent.
Oil and gold prices also fell, with futures pricing crude at $93.37 a barrel, off $1.25, or 1.3 percent, and gold down $6.60, or 0.5 percent, at $1,308.10 an ounce.
“Today seems to be a day when investors are retrenching, whether it’s based on European economic data or that 17 of the last 20 days have been to the upside,” said Art Hogan, market strategist at Lazard Capital Markets.
“It’s good news but unfortunately one of the last-watched pieces of economic data; ISM is better known for its manufacturing index,” said Hogan, of a report from the Institute for Supply Management, with its non-manufacturing index for October rising to 55.4 in October from 54.4 in September.
TD’s Ameritrade’s Kinahan also pointed to disappointing data from Europe for Wall Street’s morning drop, with the European Union cutting its outlook for euro-area expansion in 2014 and hiking its unemployment estimate as the economy looks to find its footing after recession. “The European economy is softer and their unemployment rate is going to stay fairly high,” said Kinahan.
“I think the focus for the week becomes the unemployment number on Friday. It’s really a two-month number because the last one was released late,” said Kinahan, referring to the government shutdown that temporarily halted the release of government economic reports.
Boston Federal Reserve President Eric Rosengren told CNBC that he wants to see further improvement in the labor market and in economic growth before deciding to reduce the central bank’s $85 billion in monthly bond purchases.
AOL was among those reporting quarterly results, with shares of the digital-media company rallying over 8 percent after reporting better-than-expected revenue.
Corporate earnings also included results from CVS Caremark, with the drugstore chain’s shares higher after reporting a better-than-expected quarterly profit and raising its outlook for the year. Michael Kors Holdings jumped after the apparel maker reported better-than-anticipated quarterly revenue.
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