By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market ended Tuesday
marginally lower, pausing after three straight days of gains that
sent the S&P 500 and Dow Jones Industrial Average to record
levels on Monday.
Investors found little comfort in a factory orders report, which
was mostly in line with expectations, and better-than-expected
monthly car sales.
The S&P 500 (SPX) closed less than a point lower at
1,924.24. The Dow industrials (DJI) shed 21.29 points, or 0.1%, to
16,722.34.
The Nasdaq Composite (RIXF) ended the day down 3.12 points, or
0.1%, at 4,234.08.
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action.
Rob Stein, CEO of Astor Investment Management, said that stocks
and long-term government bonds are most likely priced where they
should be.
"The economy is growing very slowly, but still growing. The
S&P 500 is up about 4% on the year and that is consistent with
the current growth environment," Stein said.
"The 10-year yield at 2.5% is not surprising given that the
inflation is at 1%, unemployment in 6s and stalled growth in the
first quarter. In fact, we fear slipping into a deflationary
environment more than inflation rising," he added.
Orders for goods produced in U.S. factories rose 0.7% in April,
the Commerce Department said Tuesday. Economists surveyed by
MarketWatch had expected orders to rise 0.6%. Factory orders
climbed by a revised 1.5% in March, compared with a prior estimate
of 0.9%. Orders for durable goods -- products meant to last at
least three years -- rose 0.6% in April. Orders for nondurable
goods increased 0.7%.
The auto industry was in focus after car makers released their
monthly sales figures.
Shares in General Motors Co. (GM.XX) and Ford Motors Co. (F)
rose 1.1% and 0.7% respectively after they released their monthly
car sales in the U.S.
GM said U.S. vehicle sales were up 12.6% in May, marking its
best monthly performance since August 2008, The Wall Street Journal
reported. The results topped analyst expectations.
Ford Motor Co. reported a 3% rise in sales in May. Chrysler
Group LLC, owned by Fiat, reported 17% growth in sales in May, as
its Jeep and Ram brands continued to deliver strong results.
In deal news, shares of Hillshire Brands Co. (HSH) jumped 9.5%
after Pilgrim's Pride raised its offer to buy the company for $55 a
share in cash, valuing the deal at $7.7 billion. Pilgrim's Pride
said the new bid represents an increase of $1.3 billion from its
initial offer. Hillshire said it would talk separately with
Pilgrim's Pride and Tyson Foods Inc. (TSN), both of which are
interested in buying the maker of Jimmy Dean sausages and Sara Lee
desserts.
Krispy Kreme Doughnuts Inc. (KKD) shares slid 15% after the
company lowered its earnings outlook for the fiscal year when it
reported results late Monday.
Dollar General Corp. (DG) rose 3.9% after the discount
retailer's first-quarter earnings of 72 cents a share came in one
penny a share less than Wall Street had projected. Net sales were
$4.52 billion, compared with expectations of $4.56 billion.
In other financial markets
Also ahead of the start of U.S. trading, Asian stocks finished
mostly higher, with Japanese shares closing at a two-month high.
Stocks in Europe remained lower after April inflation in the euro
zone came in at 0.5%, below expectations of a 0.6% reading.
U.S. Treasury prices fell, sending yields higher for a fourth
consecutive session, as prices retraced their fall in recent weeks.
The 10-year note (10_YEAR) yields rose to 2.6%.
Gold futures(GCQ4) settled with a modest gain on Tuesday, their
first in seven sessions, while oil futures(CLN4) settled slightly
higher. The dollar index (DXY) fell to 80.534, from 80.634 late
Monday.
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