Stocks Give Back Earlier Gains

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 |  Includes: DIA, QQQ, SPY
by: Midnight Trader
  • Dow Jones Industrial Average down 1.67 (-0.01%) to 12,502.81
  • S&P 500 up 0.64 (+0.05%) to 1,316
  • Nasdaq Composite down 8.13 (-0.29%) to 2,839.08

GLOBAL SENTIMENT

  • Hang Seng Index up 0.62%
  • Shanghai China Composite Index up 1.06%
  • FTSE 100 up 1.91%

U.S. stocks gave back much of their gains late in the day and the major market gauges ending the session with small declines. Energy and material stocks were the major drags on today's market, with both sectors eventually giving in to new declines in the price of crude oil and gold. Technology stocks also slumped.

Shares earlier rose briskly after the U.S. National Association of Realtors reported existing-home sales rose 3.4% in April. Speculation that China and Europe will move to support economic growth also helped buoy the markets. Industry sectors in the S&P 500 were split equally between winners and losers, with the best gains coming for financial stocks and utilities.

Sales of existing U.S homes rose last month for the first time since January in a sign the housing industry may be stabilizing. The increase lifted the sales pace to a 4.62 million annual rate, the highest pace since May 2010 and just trailing the median forecast of experts surveyed by Bloomberg News calling for a 4.61 million rate.

Median home prices climbed to to $177,400 in April, up 10.1% year over year, in part, due to a decline in foreclosures leading to fewer distressed sales at bargain prices.

Other U.S. economic news was less optimistic, however, with the Richmond Federal Reserve Bank reporting today manufacturing activity in the mid-Atlantic region slowed this month although it is still managing to eke out some growth. The Richmond Fed's manufacturing/general-business index fell to a 4 reading compared with April's 10 reading. Most subindices also fell, with new orders sliding from 13 in April to a 1 reading this month, although the employment index picked up - rising to 16 to 10.

The weekly ICSC-Goldman Store Sales index earlier today also indicated a pullback in retail sales, falling for the fourth week in a row to minus 1.7%. The weekly Redbook survey also found some weakness, with 2.7% same-store sales growth during the week ended May 19, a full percentage point drop from the prior week.

In company news, SAP AG (NYSE:SAP) late today announced a $4.3 billion deal to buy Ariba Inc (NASDAQ:ARBA), paying $45 a share for the software and information technology services company. The price marked a 20% premium over ARBA's closing price on Monday and sent the shares 19.2% higher today. SAP shares were edging lower just before the closing bell.

Also today, General Mills (NYSE:GIS) shares ended a few cents higher at $38.58 each after the food company announced plans to lay off about 850 workers as part of a $109-million global restructuring effort. GIS said it expects to record about $94 million in pre-tax severance and the asset-writedown costs during its fiscal Q4 but is continuing to target FY`12 adjusted earnings in a range of $2.53 to $2.53 per share.

Commodities are mostly lower. Crude oil for June delivery settled $1.01 lower at $91.85 a barrel after Iran reportedly agreed to allow International Atomic Energy Agency inspectors into its Parchin military complex. June natural gas rose 8 cents to $2.70 per 1 million BTU. June gold fell $12.00 to finish at $1576.60, July silver fell $0.16 to $28.15, while July copper fell 1 cent to $3.49.

UPSIDE MOVERS

(+) GENE, Issues positive update for BREVAGen genetic test for breast cancer.

(+) RDN, Major shareholder is pushing for more information on possible sale.

(+) BNHN Agrees to $296-million going-private transaction.

(+) TSLA Initiated with Buy rating at Maxim.

(+) CSUN Reports smaller-than-expected $0.71 a share Q1 net loss.

DOWNSIDE MOVERS

(-) NAK EPA warns of potential damage to salmon population from mine project.

(-) FNBN Proposes 2-million share common stock offering.

(-) EXPR Q1 sales trailed estimates by $7.2 million.

(-) FB Continues post-IPO move south.