By Joe Musso
Stocks saw little change but remained near record levels on Tuesday as investors digested conflicting economic reports in a holiday-shortened week.
The Standard and Poor’s 500-stock index fell 2.38 points, or 0.12 percent to close at 2,067.03. The Dow Jones Industrial Average slipped 2.96 points, or 0.02 percent to close at 17,814.94. The NASDAQ Composite Index gained 3.36 points, or 0.07 percent to close at 4,758.25.
Consumer discretionary stocks were the biggest gainers in the S&P, rising 0.23 percent on the day, while energy stocks dropped 1.6 percent on continued declines in oil prices. The price of a barrel of crude fell $1.97 to $74.20 Tuesday. Since June, the price has dropped by 26 percent.
Falling oil prices may hurt energy investors, but the reeling prices mean big time relief at the gas pump for consumers about to enter the holiday shopping season.
“It’s like a tax cut for consumers when gas prices are this low and that’s a great thing for holiday sales,” said Bill Lynch, Director of Investments at Hinsdale Associates Inc., in a phone interview. They [holiday sales] should be up in the neighborhood of a 4.0 to 4.5 percent increase this year.”
The Commerce Department revised third quarter gross domestic product numbers upward to 3.9 percent at an annualized rate, from the 3.5 percent initially reported, capping off the best six-month period since 2003.
“Most expectations were for GDP to be revised down rather than up so that was a real eye opener for investors,” said Lynch.
Despite lower oil prices and strong economic activity, U.S. consumer confidence fell in November to a five-month low of 88.7 from 94.1 in October. Consumers were discouraged by the current job market and business conditions in the short-term, but Lynch believes long-term confidence remains intact.
Bond prices firmed on the day; the yield on a 10-year note dropped .05 of a percentage point to 2.26 percent.
United Technologies was the leader in the financial clubhouse today after a 2.68 percent increase, closing at $111.71. The gains followed the company’s Monday announcement that long-time CEO Louis Chenevert is retiring. Analysts said investors were cheered by Chenevert’s replacement, former Senior Vice President and Chief Financial Officer Greg Hayes.
Energy companies such as Nabors Industry Ltd., Apache Corp. and Halliburton Company were the biggest losers as oil prices fell ahead of this week’s meeting of the Organization for Petroleum Exporting Countries. The cartel is not expected to reach an agreement to cut production.
In other market news, Apple Inc.’s market capitalization exceeded $700 billion during the session before closing slightly below the mark.