Stocks retreat on data on day after rally
Stocks slipped on Tuesday as Dow component Procter & Gamble Co.'s
lackluster results, coupled with weaker-than-estimated data on consumer spending and housing, prompted investors to exercise caution a day after the market's 2 percent rally.
P&G dropped 3.4 percent to $59.94, ranking as the top drag on the Dow industrials after the consumer goods maker reported fourth-quarter earnings that missed expectations.
After a nice little rally, it's probably a little bit of a pause, said Tommy Huie, president of Marshall Funds in Milwaukee.
When the consumer sector has some disappointments in terms of consumption and retail spending, P&G down 3 or 4 percent, that is kind of tough to overcome.
An index of pending home sales slid to a record low in June while consumer spending and personal incomes were flat, providing mounting evidence of a slowdown in economic growth.
But the market's losses were curbed by fellow Dow component Pfizer Inc.
, which posted higher-than-expected profit and provided a bullish long-term outlook.
Pfizer, whose stock climbed 5.6 percent to $16.34, helped boost healthcare-related stocks, as the S&P Healthcare sector index <.GSPA> rose 0.8 percent and the Morgan Stanley Healthcare Payor Index <.HMO> gained 1.5 percent.
The Dow Jones industrial average <.DJI> dropped 38.00 points, or 0.36 percent, to 10,636.38. The Standard & Poor's 500 Index <.SPX> shed 5.40 points, or 0.48 percent, to 1,120.46. The Nasdaq Composite Index <.IXIC> lost 11.84 points, or 0.52 percent, to 2,283.52.
The S&P Consumer Discretionary Sector <.GSPD> fell 1.3 percent while the S&P Retail index <.RLX> lost 1.9 percent.
Other data included U.S. factory orders, which fell steeply in June, and a plunge in an index of pending home sales to a record low of 75.7 in June, giving additional evidence that growth assumed a more sluggish tone at the end of the second quarter.
We've actually seen this for a number of days where the economic news has been, not terrible, but not particularly positive, and yet the market hangs in there very well, said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York.
It's certainly a positive sign that this market has some staying power up at these levels, and has the potential to go higher here.
The S&P 500 held above its 200-day moving average of around 1,114, a potentially positive signal. But it didn't quite maintain its grip on the 1,121 mark, the midpoint between the historic high reached in October 2007 and the 12-year closing low hit in March 2009.
Analysts also noted the market was in line for some consolidation after Monday's climb to a 10-week high -- coming off July's jump of nearly 7 percent -- the best month in a year.
U.S.-listed shares of Research in Motion
Regarding the new BlackBerry phone, NPD analyst Ross Rubin said, The operating system has some new touches and integration, but there's nothing here that really represents a leap forward beyond what others are providing.
Volume was light, with about 7.25 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, well below last year's estimated daily average of 9.65 billion.
Declining stocks outnumbered declining ones on the NYSE by a ratio of 3-to-2, while on the Nasdaq, nearly two stocks fell for every one that rose.
(Reporting by Chuck Mikolajczak; Additional reporting by Ryan Vlastelica; Editing by Jan Paschal)
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