By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks wavered between gains and
losses on Tuesday, but the Dow industrials remained on track for a
record close, as Wall Street weighed earnings and a regional
factory gauge.
"As I watch stock prices move up a lot faster than earnings, it
causes me to be a lot more cautious," said Alan Skrainka, chief
investment officer at Cornerstone Wealth Management in Des Peres,
Mo.
"It's a wonderful time to rebalance portfolios; I think I'll
feel pretty good about that come September. Unless things change
dramatically, September is the month that we start tapering," said
Skrainka, referring to potential reductions in the Federal
Reserve's $85 billion in monthly bond purchases.
After a 58-point climb to an intraday record of 15,604.22, the
Dow Jones Industrial Average (DJI) was lately up 33.68 points, or
0.2%, at 15,579.23, with United Technologies Corp. (UTX) pacing
blue-chip gains after reporting quarterly earnings above Wall
Street estimates.
Dow component DuPont (DD) shares also rose after the chemical
producer reported a drop in quarterly earnings and said it was
considering a spinoff or potential sale of its
performance-chemicals business.
Halting gains after a four-session winning streak, the S&P
500 index (SPX) fell half a point to 1,694.95, with consumer
staples leading sector losses and energy leading sector gains.
The S&P 500 rose to its 23rd record close this year on
Monday.
Wall Street had began modestly higher as companies from DuPont
to Texas Instruments Inc. (TXN) beat earnings expectations.
Stocks relinquished much of their gains as the Federal Reserve
Bank of Richmond said manufacturing activity in the central
Atlantic region declined in July, with a seasonally adjusted
composite index of manufacturing activity down 18 points in July to
a reading of -11. The Richmond Fed also said that activity in the
service sector softened in July.
"While the Richmond manufacturing survey is never market moving
itself, its weakness following the better New York and Philly
reports points to a still mixed bag in manufacturing," emailed
Peter Boockvar, chief market strategist at the Lindsey Group
LLC.
United Parcel Service Inc. (UPS) shares fell after the global
shipper reported a smaller quarterly profit, while Lockheed Martin
Corp. (LMT) gained after an earnings beat. Freeport-McMoRan Copper
& Gold Inc. (FCX) climbed after the biggest publicly traded
copper producer reported second-quarter earnings that topped
estimates.
Netflix Inc. (NFLX) dropped a day after the online-entertainment
service reported subscriber growth below some estimates in the
second quarter, although earnings surged compared with the same
period a year ago.
CapitalSource Inc. (CSE) jumped after PacWest Bancorp (PACW)
said it would acquire the commercial lender for about $2.29 billion
in cash and stock. Sourcefire Inc. (FIRE) shares rallied after
Cisco Systems Inc. (CSCO) agreed to buy the cybersecurity company
in a deal worth about $2.7 billion.
Tech giant Apple (AAPL) will likely garner much of the attention
Tuesday after weak results from Microsoft Corp. (MSFT) and Google
Inc. (GOOG) last week. Apple will release quarterly earnings after
the market close on Tuesday.
The Nasdaq Composite (RIXF) lost 9.33 points, or 0.3%, to
3,591.05.
Advancers outpaced decliners on the New York Stock Exchange,
where 300 million shares traded as of 1:30 p.m. Eastern. Composite
volume neared 1.8 billion.
In other financial markets, gold prices nudged lower after an
impressive run on Monday, when the August contract (GCQ3) posted
the heftiest one-day rally in more than a year.
Short-covering likely factored into gold's bounce after prices
fell more than 30% from late 2012, with Federal Reserve Chairman
Ben Bernanke's pushback against monetary tightening a factor
driving the action, wrote Marc Chandler, global head of currency
strategy at Brown Brothers Harriman & Co., in emailed
commentary.
But the impact could be short-lived.
"Despite the market's recent misinterpretation of the Fed's tone
regarding QE [quantitative easing] exit, genuine inflation concerns
are nowhere on the horizon, neither is systemic risk -- two key
variables that typically support sustained gold rallies. On the
demand side, India has just placed yet more restrictions on gold
imports," he wrote.
Tuesday's data calendar also had the Federal Housing Finance
Agency's home-price index for May rising 0.7%.
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