A late day rally saved Tuesday's session, as investors were taken for a rollercoaster ride in the afternoon. The Dow Jones Industrial Average rose 51.7 points (+0.40%), Standard & Poor's 500 index increased 6.4 points (+0.45%), and the Nasdaq finished up 3.4 (+0.13%). Volume was solid on the NYSE at 1.87 billion shares, and advancers beat decliners by a ratio of about 3:2.
Stocks traded higher early in the session helped by solid quarters and upbeat outlooks from Hewlett-Packard (+0.12%, full story) and Nordstrom (+12.1%, full story) announced late Monday. However, Tuesday morning's news was mixed. Freddie Mac (-28.7%) reported a third-quarter loss of $2.02 billion after writing down losses in assets (full story). The kicker was that the lender was considering cutting its dividend by 50%. Housing starts unexpectedly jumped 3.0%, but new permits fell 6.6%, keeping the near future bleak for housing (full story). Target (-4.1%) reported profits fell last quarter, and provided a cautious outlook for the holidays (full story).
The Fed Minutes from the October meeting were released at 2 P.M., and pushed the major indices to session lows. The minutes showed member of the Fed thought the decision to cut rates last meeting was a "close call," surprising some investors that the officials did not feel it was more necessary (full story). The Fed also lowered its 2008 GDP growth forecast to 1.8%-2.5% from 2.5%-2.75%. The markets however, averted significant losses, and rallied enough in the last minutes of the day to finish with modest gains. The US 10-year Treasury note lost 5/32 in price, and now yields 4.09%.
Energies (+3.3%) led the pack Tuesday, while financials (-0.1%) was unable to eke out a gain. Crude increased $3.39 to finish at $98.03/barrel. Exxon Mobil (+4.4%) was upgraded to a "buy" at UBS, and also announced a new deal to explore a region off the coast of Libya (full story). Barnes & Nobles (+13.0%) surged after third-quarter results beat estimates and the company upped its full-year outlook (full story).
Jobless Claims (8:30 AM), Consumer Sentiment (10:00 AM), Leading Indicators (10:00 AM), and the EIA Petroleum Status Reports (10:00 AM) will all be released Thanksgiving Eve.
Commentary: Financials, Industrials, Energy, Consumer Discretionary, Telecom Heavily Oversold • Weak Data Spell Slowdown
Stocks to watch: FRE, TGT, XOM, BKS