By Victor Reklaitis, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks ended with modest losses
on Tuesday, with the Dow industrials retreating from the previous
session's record close.
The market felt some pressure from Federal Reserve officials
giving fresh warnings about a potential stimulus reduction, as well
as from a decline in small-business sentiment.
Joe Bell, senior equity analyst at Schaeffer's Investment
Research, said he views stocks as basically consolidating as
third-quarter earnings season winds down.
"It seems like we're still in the middle of digesting the strong
past month or so that we've had," Bell told MarketWatch.
The S&P 500(SPX) slipped 4.20 points, or 0.2%, to close at
1,767.69, while the Dow Jones Industrial Average(DJI) fell 32.43
points, or 0.2%, to end at 15,750.67.
The Nasdaq Composite(RIXF) was essentially unchanged, edging up
0.13 point to 3,919.92.
* Today's market-moving news: Atlanta Fed President Dennis
Lockhart said the central bank could cut back on its bond buys as
soon as December. Dallas Fed President Richard Fisher also warned
about a stimulus reduction, saying "at some point we will have to
taper." Meanwhile, the National Federation of Independent Business
reported small-business optimism dropped in October.
* What strategists are saying: Regarding the moderate selling,
Scott Redler said in an email Tuesday that "some blame" Fisher's
comments on "how we can't have QE [quantitative easing] forever."
But Redler, chief strategist at T3 Live and T3 Trading Group, added
that it "could also just be that we need another day or so to
digest Friday's move and last week's volatility." Markets are
largely looking past everything this week until Janet Yellen's
nomination hearing on Thursday, said Craig Erlam, market analyst at
Alpari U.K., in an email. Yellen is expected to take over
leadership of the Federal Reserve.
* Other buzz: Stocks have surged enough and are due for a
correction, according to a growing number of market observers. Yet
others have a different take. Read more about it in this Tell blog
post.
* What's the trend:With Tuesday's losses, the S&P 500 and
Dow halted a two-day winning streak. The decline follows a mild
move up on Monday, when the Dow achieved a record close, and
Friday's big jump after a stronger-than-expected October jobs
report. Last week, the S&P 500 and Dow posted their fifth up
week in a row. They have gained about 24% and 20% so far this year,
respectively.
* Today's movers & shakers: Dish Network Corp. rose 6% after
the satellite TV provider said it swung to a profit in the third
quarter. But Rackspace Hosting Inc. tumbled 12% after the
cloud-computing company posted third-quarter earnings that missed
expectations late Monday. Read more in the Movers & Shakers
column.
* Other markets:European stocks mostly lost ground, while Asian
equities largely advanced. China's Third Plenum finished with
Communist Party leaders pledging to allow the market to play a
"decisive" role in allocating resources. Gold and crude oil fell,
as the dollar rose.
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