By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks attempted a rebound
Monday, but gave up most gains after home sales data showed a drop
in December. Blue chips outperformed on an optimistic Caterpillar
Inc. forecast.
Indexes struggled to recoup some of the deep losses from last
week, their worst week in over a year, after weak data from China
and selloffs in emerging-markets currencies triggered a global
flight from equities.
The S&P 500 (SPX) was down 2 points, or 0.1%, at 1,788 after
spending the early part of the session higher. The Dow Jones
Industrial Average (DJI) added 13 points, or 0.1%, to 15,891. It
was up about 48 points before the 10 a.m. housing data.
The Nasdaq Composite (RIXF) gave up opening gains and dipped in
and out of negative territory. The tech-heavy index was recently 23
points, or 0.6%, lower at 4,104. Follow the stock market live
blog.
Upbeat results from Caterpillar Inc. lifted the Dow. Shares of
Caterpillar Inc. (CAT), seen as an economic bellwether for global
activity, rose 5.6%. The company posted fourth-quarter earnings per
share of $1.54, topping forecasts, and a 44% profit gain. Cost
cutting offset a sales drop of 10%. Caterpillar gave a forecast
that beat analysts estimates for the year, and said it expects a
$1.7 billion buyback in the first quarter of this year.
Sales of new single-family homes fell in December, but the whole
of 2013 saw the highest sales level in five years, the government
reported Monday. Sales of new single-family homes dropped 7% in
December due to harsh winter weather. The median price of new homes
ticked up in December and for 2013, the median price hit $265,800,
up 8.4% from the prior year, the strongest annual growth since
2005.
Read: How much gas in economy's tank? Let's see
Homebuilders fell after the housing data and some ratings
downgrades. KB Home was downgraded to underweight from equalweight
and Toll Brothers' rating was cut to equal weight from
overweight.
Shares in KB Home (KBH) gave up gains to fall 1.1%, while Toll
Brothers' (TOL) shares were down a fraction.
Shares in Google Inc (GOOG) fell 2.6% after the company said it
bought artificial-intelligence company DeepMind. Samsung
Electronics Co. and Google also signed a long-term cross-licensing
deal on technology patents.
Investors will also focus on the Federal Reserve this week as
the central bank will take center stage on Wednesday. Most
observers expect the central bank to cut its bond-buying again, by
about $10 million to $65 billion a month. Expectations of Fed
tapering are among the reasons Wall Street suffered its worst
weekly performance in more than a year last week.
In other markets, European stocks were lower on Monday, while
Asia followed up those Wall Street losses with a 2.5% drop for the
Nikkei 225 Index and a 2% loss for the Hang Seng Index . Gold edged
lower and natural-gas prices(NGG14) fell.
More must-reads from MarketWatch:
How investors should read the news
Movers: Apple, Google in focus; Caterpillar rises on
earnings
Stock investors trash market darlings, face Apple, Fed
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