By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market edged lower on
Tuesday after a duo of disappointing reports weighed on sentiment.
Empire State manufacturing activity dropped by more than expected
while a gauge of confidence among home builders also plunged in
February.
Markets were closed on Monday for Presidents' Day holiday.
The S&P 500 (SPX) edged down 2 points, or 0.2% to 1,835.85.
The benchmark index opened in positive territory and began slipping
about 5 minutes before the release of the housing data. Eight of 10
main sectors were trading lower.
The Dow Jones Industrial Average (DJI) dropped 40 points. or
0.3%, to 16,114.34, with Coca-Cola Company (KO) leading the losses
after poor earnings results.
The Nasdaq Composite (RIXF) was the only index still trading in
positive territory, up 4 points, or 0.1%, at 4,250.57. Follow our
stock market live blog.
Manufacturing activity in the New York region gave up most of
the strong gains made during the prior month although it remained
in positive territory, according to data released Tuesday. The
report fits a picture of a manufacturing sector struggling with
severe winter weather. The ISM index for the U.S. showed
manufacturers suffered from the January chill last month.
A gauge of confidence among home builders plunged in February,
dropping to the lowest level in nine months, led by weaker views on
present sales of single-family homes, according to data released
Tuesday.
The housing-market index dropped to 46 this month, signaling
that builders, generally, are pessimistic about sales trends,
according to the National Association of Home Builders/Wells Fargo,
which cited "unusually severe weather conditions," among other
factors.
Big movers on Wall Street Tuesday include Forest Laboratories
Inc. (FRX) with shares surging 29% on news that Actavis PLC (ACT)
will buy its New York-based rival in a cash-and-stock deal worth
$25 billion. Actavis leapt 7.4%.
Shares of Coca-Cola Co. (KO) were down 4.1% after the beverage
company's fourth-quarter profit and revenue came in below analyst
forecasts.
Shares of Tesla Motors Inc.(TSLA) were up 2.1% Tuesday after a
report that Apple Inc.'s (AAPL) top deal-maker met with the car
company's CEO, Elon Musk, last year as part of its quest to snap up
companies to fuel growth. Apple shares were up 0.9%.
BlackBerry Ltd. (RIMM) is up 6.9% following news last session
that billionaire fund manager Dan Loeb took a stake in the company
as part of his investment in struggling device makers.
FBR & Co. also upgraded BlackBerry's stock to market-perform
from underperform, with Analyst Scott Thompson writing in a note:
"We expect the company's liquid assets and early positive momentum
could limit downside in shares in the near term."
Prana Biotechnology Ltd. (PRAN) was up 22% after the
pharmaceutical company said it met the endpoint for one phase of a
clinical study testing its treatment for Huntington disease.
Herbalife (HLF) is due to report fourth-quarter results after
the market close and is expected to post earnings of $1.25 a share.
Herbalife said earlier this month that it plans to offer $1 billion
in convertible notes and use the proceeds to buy back shares.
Shares rose 1%.
In other financial markets, the trading mood was mixed. In Asia,
Japan's Nikkei 225 index rallied 2.9% after the Bank of Japan said
it would double incentives designed to increase bank lending. Other
Asian markets closed mixed.
European stock markets traded broadly lower and stayed in
negative territory after a disappointing reading on German economic
sentiment. Gold prices edged higher, the dollar and oil prices
rose.
More must-reads from MarketWatch:
Soros doubles a bearish bet on the S&P 500, to the tune of
$1.3 billion
Investor prisoner, volume control, when Apple met Tesla and
Forest Labs
'Downton Abbey' economy, here we come, warns Larry Summers
You're invited to ... Bitcoin: Boom and Bust
Subscribe to WSJ: http://online.wsj.com?mod=djnwires