Originally Posted Online: Nov. 27, 2012, 11:49 am
Last Updated: Nov. 27, 2012, 1:41 pm
Stocks fail to get boost from deal on Greek financial aid, machinery orders
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NEW YORK (AP) — Investors are taking little comfort from the latest deal to deliver financial aid to Greece and increases in U.S. consumer confidence and orders for machinery and equipment.
The Dow Jones industrial average fell 68 points to 12,899 as of 2:30 p.m. Tuesday. The Standard & Poor's 500 fell five points to 1,401. The Nasdaq composite index lost three points to 2,973. Stocks were moving between small gains and declines for most of the day.
ConAgra advanced $1.29 to $29.58 after it agreed to buy Ralcorp for $5 billion in a deal that will make it the nation's biggest maker of private-label foods. Ralcorp surged $18.61 to $88.84. Corning Inc., a specialty glass maker, rose 83 cents to $12.18 after it said that North American television sales are stronger than expected in the fourth quarter, boosting demand for its products.
While stocks have gained this year as the Federal Reserve has maintained it bond-buying stimulus program, concern about global growth and the "fiscal cliff" in the U.S. may limit further advances, said Uri Landesman, President of Platinum Partners, a New York-based hedge fund. The S&P is up 11 percent this year, the Dow 6 percent.
"The glass is half-empty right now," Landesman said. "With the S&P over 1,400 you're going to need to see really good data for the market to rise, and the data wasn't good enough to really pick us up here."
Two reports that suggested that the outlook for the U.S. economy may be improving failed to encourage investors to push stocks higher.
Consumer confidence rose this month to the highest level in almost five years, pushed up by steady improvement in hiring. The Conference Board's consumer confidence index rose to 73.7 in November from 73.1 in October. Both are the best readings since February 2008.
The government reported separately that U.S. companies increased their orders of machinery and equipment last month, a sign that business investment is rising. Orders rose 1.7 percent in October, the best showing since a 2.3 percent rise in May.
Stocks have pared some of the losses that followed the U.S. elections Nov. 6. That decline came as investors fretted over a looming budget crisis in Washington, commonly referred to as the fiscal cliff.
Negotiations are continuing. President Barack Obama plans to make a public case this week for his strategy for dealing with the issue as he pressures Republicans to allow tax increases on the wealthy while extending tax cuts for families earning $250,000 or less.
"We're in a bit of no-man's land, we're waiting to hear what comes out of Washington," said Ben Schwarz, chief market strategist at Lightspeed Financial. "Both sides are looking to compromise and that's positive."
The S&P declined as much as 5 percent in the weeks after voters returned a divided government to power, with President Barack Obama returning to the White House and Republicans retaining control of the House. The two parties must agree on measures to trim the U.S. budget deficit before the end of the year to avoid a series of sharp tax increases and spending cuts that will come into force Jan. 1. Economists have warned that the measures could push the economy back into a recession.
The S&P rose as high as 1,465 in September, the highest in almost five years, after the Federal Reserve said it would extend its so-called quantitative easing program and buy more bonds. The program is intended to lower borrowing costs and stimulate hiring.
Stocks initially advanced in Europe after Greece's partners in the euro currency and the International Monetary Fund agreed to release funds the country needs to avoid bankruptcy. They also agreed to introduce a series of measures designed to reduce the country's debts to a more manageable level within a decade.
The yield on the 10-year Treasury note edged down to 1.65 percent.
Among other stocks making big moves:
— Las Vegas Sands Corp. rose $2.62 to $46.67 after the casino operator said it would pay a special dividend of $2.75 per share, distributing about $2.26 billion to shareholders before the end of the year.
— Airgas Inc., a specialty supplier of medical and industrial gases, fell $2.20 to $88.84 after disclosing that its chairman sold 1.2 million shares of the company's stock in a privately negotiated block trade.
—Real estate trust Equity Residential rose $1.03 to $55.46 after agreeing, together with AvalonBay Communities Inc., to buy apartment-building owner Archstone Inc. from Lehman Brothers. AvalonBay gained $3.86 to $132.80.