Energy stocks up, others wobble after Dow's stellar week
NEW YORK (AP) — Stocks wavered between slight gains and losses Tuesday after the Dow Jones industrial average had its best week in two years.
The Dow Jones industrial average slipped 2 points to 12,580 in afternoon trading. The Dow had risen as many as 19 points after the Commerce Department reported an increase in factory orders. The Standard & Poor's 500 index fell 2, or 0.2 percent, to 1,338. The Nasdaq composite index rose 4, or 0.2 percent, to 2,820. All three indexes were moving in a narrow range.
Trading volume is expected to be light this week. U.S. markets were closed Monday for the July 4th holiday. Many traders are looking ahead to next week, when aluminum maker Alcoa Inc. becomes the first major U.S. company to report financial results.
Last week the Dow rose 648 points, its best week in two years, after Nike reported strong earnings and Greece cleared its final hurdle before receiving another round of loans. Automakers also reported that their sales rose 7 percent in June, compared to a year ago.
The gains erased nearly six weeks of losses. Prior to last week stocks had been falling since late April because of concerns about the debt crisis in Europe, weak home sales in the U.S. and slowing manufacturing. By mid-June, stocks had given up most of their gains for the year.
With last week's rally, the Dow is now down just 1.8 percent from April 29, when it reached a three-year high. The Dow is up 8.5 percent for the year. The S&P 500 index and the Nasdaq composite are both up about 6 percent.
Analysts are optimistic about the corporate earnings reports that will start to come in next week. Earnings from companies in the S&P 500 index are expected to rise 14 percent from the same period a year ago, according to FactSet. Revenue is expected to rise 11 percent.
"There hasn't yet really been a reason to get concerned about corporate America," said Randy Warren, chief investment officer of Warren Financial Service. "It's the rest of the America that's struggling."
Even while companies have been reporting higher profits, unemployment has remained stubbornly high since the recession officially ended in June 2009. The Labor Department will report the latest figures on unemployment and payrolls on Friday, and analysts expect to hear more bad news. They forecast that the unemployment rate will remain unchanged from May at 9.1 percent. They also expect that employers added only 90,000 jobs last month, below the 100,000 threshold that economists say is needed to prevent the unemployment rate from increasing.
Several stocks rose sharply after deals were announced. Immucor Inc. rose 30 percent after the maker of blood-testing equipment agreed to be bought by private-investment firm TPG Capital in a deal worth $1.97 billion.
Southern Union Co. rose 2.9 percent after Energy Transfer Equity LP said it would pay $5.1 billion for the pipeline company. The deal trumped a $4.9 billion bid made in late June by rival Williams Cos.
Netflix Inc. rose 7.4 percent to $287.85 after announcing that it would expand its online video streaming service to 43 countries in Latin America and the Caribbean.
