Wall Street: Tuesday close

13 April 2012

STOCKS wobbled through an indecisive session, finishing modestly lower as investors, worried about the economy and terrorism, had no conviction to sustain even a mild wave of bargain-hunting.

With the Dow Jones Industrial Average having fallen 5% since 8 March, investors sought to rebalance their portfolios with stocks that, while still fundamentally sound, were hit hard in the two-week sell-off.

But stocks gave up their gains twice during the session as nervous short-term investors cashed in their intraday profits.

'The market right now is probably at the lower end of a fair-value range,' said Kevin Caron, market strategist for Ryan, Beck. 'The near-term trader, trading off the news on the war on terrorism, is going to take this opportunity to move money out of this market. But for long-term investors, this is a good time to step in.'

The Dow fell 1.11, or 0.01%, to 10,063.64 after rising as much as 60 points early in the session and then ratcheting up and down through the session.

Broader stock indicators also ended narrowly lower after a volatile day. The Standard & Poor's 500 index was down 1.50, or 0.1%, at 1093.90, while the Nasdaq composite index lost 8.10, or 0.4%, to 1901.80.

Volume remained light as investors carefully chose their bets, opting for the financial, transportation and healthcare sectors - all defensive stocks meant to ride out short-term volatility.

Many investors sat out the session, waiting for Thursday's gross domestic product and first-time jobless data for a sign of whether the economic recovery would gain momentum.

Lower-than-expected numbers, however, could prompt another round of selling in a market that's been falling for weeks.

Analysts said the market may be close to finding a bottom, although they said stocks might give more ground before buyers finally settle in for good.

'People have been forced to digest a lot of bad news very early, and there's some feeling that they took too many chips off the table too quickly,' said Jack Caffrey, equities strategist at JP Morgan Private Bank. 'With the preponderance of the volume yesterday being on the downside and some better news from earnings, we may have the ingredients for a short-term rally.'

Financial services stocks led the buying, as Goldman Sachs became the latest financial company to far outpace earnings estimates. Goldman Sachs, up 9 cents at $101.39, beat estimates by 85 cents per share and boosted the entire sector. Merrill Lynch lost 9 cents to $59.20 and JP Morgan Chase gained 18 cents to $40.98.

Jones Apparel climbed 12 cents to $35.78 as it launched a $297m hostile takeover bid for Maxwell Shoe, up 50 cents at $22.59.

The troubles for Walt Disney continued as six of the nation's largest pension funds demanded an immediate meeting with the board to express their concerns over the strength and direction of the entertainment giant. Disney nonetheless rose 20 cents to $25.10.

Microsoft shed 35 cents to $24.15 as it lashed out against the European Union for its proposed $614m fine for alleged anti-trust violations. The European Union is also expected to require Microsoft to release a version of the Windows operating system in Europe without the Windows Media Player bundled in.

Viacom said it would collaborate with the Shanghai Media Group to produce children's programming in China's largest city. Viacom slipped 5 cents to $38.05.

Advancing issues outnumbered falling stocks by nearly 8 to 5 on the New York Stock Exchange, where volume came to 1.44bn shares, compared to 1.45bn on Monday.

The Russell 2000 index of smaller companies rose 1.93, or 0.4%, to 560.92.

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