With the U.S. economic outlook pretty much uncertain investors wondered if it is the right time to buy stocks. However, they found little reason to pick up shares and chose to remain on the sidelines, sending trading volume to its lowest of the year.
The Dow industrials failed to snap their four-day losing streak, and fell slightly. However, the Nasdaq composite index managed an 8-point, or 0.4%, advance due to strength in its technology components. The S&P500 index edged up 0.13 points, or 0.01%, to 1079.38. The market’s measure of volatility, the CBOE Vix maintained its perch above 26, at 26.10, down 0.5%. On the New York Stock Exchange, advancing shares beat those that fell in price by a two-to-one margin on volume of 788 million shares.
This morning’s futures suggest a higher opening as traders glean economic data for signs of recovery. Meanwhile, a multi-billion dollar deal for Potash (NYSE:POT) valued at $38.5 billion, has raised hopes for additional deals.
With stocks losing their sheen, investors turned to safe havens, sending the 10-year note up 30/32 in price as its yield dropped below 2.6% for the first time since March, 2009, ending the session at 2.573%. Gold continued to shine on its safe-haven appeal, as prices registered their fourth straight-session advance, up $9.60 to $1,226.20, a six-week high.
The uncertain economic situation and global growth fears continued to weigh on crude prices, however, sending them off 0.2% to $75.24 for their fifth straight day of declines. Economists at UBS (NYSE:UBS) lowered their 2010 GDP growth forecast to 2.6% from 3%, and cut their estimates for third quarter growth to 1.5% from 3%, citing weak consumer spending patterns and slow construction activity.
On the DJIA, eighteen components closed in the red, led by losses in 3M (NYSE:MMM), off 0.7%, Boeing (NYSE:BA), down 0.7%, and Travelers (NYSE:TRV), off 0.5%. Those leading the advance were tech shares Cisco (NASDAQ:CSCO), up 2.6%, and Intel (NASDAQ:INTC), up 1.7%.
On the S&P500, six industry sectors managed gains on the day, led by basic materials (+0.6%). A weaker dollar helped send metal prices higher even as economic growth worries persisted. Newmont Mining (NYSE:NEM) shares rose 1.8%, Rio Tinto (NYSE:RTP) gained 1.7%; Freeport-McMoRan (NYSE:FCX) added 0.8%. The strength in technology shares was built on reports that Dell (NASDAQ:DELL) had agreed to acquire 3PAR (NYSE:PAR) for about $1.15 billion in cash, or $18 per share. sectors ending the day in the green were industrial shares (+0.1%), consumer goods (+0.1%), oil and gas (0.04%), and consumer services (+0.01%). Pulling the index lower were health care shares, off 0.3%, telecommunication issues, down 0.2%, financials down 0.1% and utilities off 0.03%.
Yesterday, Lowe’s (NYSE:LOW) reported a slightly weaker earnings and revenue and said it is cautious in the current economic environment. Lowe’s CEO noted, “We see the economy bouncing along the bottom in 2010, resulting in a transition year for our industry…We don’t expect strong industry growth until we experience consistent improvement in the labor and housing markets, which likely will not occur until 2011.”
