US stocks mixed in afternoon trading; Data show a boost in wholesale business stockpiles
Stocks were mixed in afternoon trading Tuesday as investors picked through a thin slate of corporate financial results and a report showing that wholesale businesses increased their stockpiles in January.
KEEPING SCORE: The Standard & Poor's 500 index dipped two points, or 0.1 percent, to 1,874 as of noon Eastern time. The Dow Jones industrial average shed 20 points, or 0.1 percent, to 16,398. The Nasdaq composite added four points, or 0.1 percent, to 4,338.
WHOLESALE TRENDS: The Commerce Department reported that U.S. wholesale businesses suffered their steepest sales drop in nearly five years in January, yet they continued to increase their stockpiles. That suggests that companies expect the economy to roar back after an abrupt winter slowdown. Rising stockpiles boost economic growth because they reflect increased production at factories, a sign that wholesalers anticipate a stronger economy.
QUIET START: Global stock markets steadied Tuesday after declines the day before. There was little corporate or economic news for traders to consider. Most indexes were flat or modestly higher after declining Monday on weak Chinese trade figures that reignited fears of a deeper slowdown in the world's No. 2 economy.
David Roda, regional chief investment officer at Wells Fargo Private Bank, said much of the economic data coming out this week will be affected by the impact of harsh winter weather, something the market is already accounting for. "I think the biggest mover of markets this week will probably be changes in what's going on geopolitically with respect to the Russia-Ukraine crisis," Roda said.
COMEBACK KID: J.C. Penney jumped 75 cents, or 9 percent, to $9.18 after Citigroup upgraded the department store chain, praising the retailer's efforts to recover from a botched overhaul that alienated longtime customers.
SECTOR WATCH: Seven of the 10 sectors in the S&P 500 index were down, with telecommunications leading the declines. Moving counter to the broader trend were the information technology, health care and consumer staples sectors. Among the companies in the S&P 500, McDonald's led the gainers, adding $3.51, or 3.7 percent, to $98.71.
TEEN RETAILER ANGST: American Eagle Outfitters tumbled 75 cents, or 5.2 percent, to $13.47 after the store chain issued a fiscal first-quarter outlook that fell short of Wall Street's expectations. The company also reported an 89 percent slide in its fourth-quarter net income as winter storms weighed on sales. Urban Outfitters, another teen retailer, fell $1.64, or 4.3 percent, to $35.87 after reporting its own results.
RECALL REVIEW: General Motors dipped 68 cents to $36.42. A congressional committee is investigating the way the automaker and a federal safety agency handled a deadly ignition switch problem in compact cars.
YIELD PLAY: The yield on the 10-year Treasury note held steady at 2.78 percent. The yield, which affects rates on mortgages and other consumer loans, has been mostly rising this month from a low of 2.60 percent on March 3.