By Donna Kardos Yesalavich
NEW YORK (MarketWatch) -- U.S. stocks wavered Tuesday as
investors continued to trade cautiously following last week's
rally, but deal activity in the energy sector and a pick-up in
small-business activity provided a boost.
The Dow Jones Industrial Average (DJI) slipped 14 points, or
0.1%, to 11393. Weighing on the measure, Chevron (CVX) fell 0.9%
after the energy giant agreed to pay $3.2 billion in cash and
assume $1.1 billion in debt to purchase Atlas Energy. Atlas
shareholders will receive $38.25 a share in cash, a premium of 21%
over its Monday closing price. Shares of Atlas, which is not a Dow
component, surged 36%.
The Nasdaq Composite (RIXF) climbed 0.1% to 2582. The Standard
& Poor's 500 index (SPX) fell less than a point to 1223, with
its financial sector leading to the downside while its energy and
materials sectors rose. The Chevron deal boosted energy stocks
while gains in gold lifted metals companies including
Freeport-McMoRan Copper & Gold (FCX), which climbed 2.8%.
The euro edged up to $1.3918 after a Greek Treasury-bill auction
passed reasonably well, helping ease worries over the financial
health of peripheral debtor nations in the euro zone. Greece's
auction of 300 million in 26-week Treasury bills was taken as a
sign that investor demand remains relatively strong, as its
bid-to-cover ratio climbed.
Also providing encouragement, small-business activity in the
U.S. picked up in October and job creation turned positive,
according to the the National Federation of Independent Business.
Its Small Business Optimism Index rose 2.7 points to 91.7 last
month, although the NFIB noted "this is still a recession level
reading based on index values since 1973."
The NFIB report also called the Federal Reserve's further
quantitative easing action to be "a highly doubtful policy course,"
adding to a chorus of criticisms over the central bank's pledge to
inject the U.S. economy with $600 billion of stimulus. Global
controversy has been mounting over the Fed's plans, with President
Barack Obama defending the move while China, Russia and the euro
zone have come out against it.
The debate is heating up ahead of a G-20 summit that begins
Wednesday night in Seoul, which is shaping up as a showdown between
exporting powers, such as Germany and China, and nations such as
the U.S. that are struggling to emerge from recession and high
unemployment. Ahead of the meeting, tensions have flared in
particular between German and U.S. officials.
Gold futures continued to trade at record highs Tuesday above
$1400 an ounce, boosted by the prospect of the Fed flooding the
financial system with money. Investors often buy the precious metal
as protection against inflation.
Meanwhile, the U.S. Dollar Index (DXY), tracking the U.S.
currency against a basket of six others, slipped 0.3%. Treasurys
rose, pushing the yield on the 10-year note (UST10Y) down to 2.55%.
Crude-oil futures climbed above $87 a barrel.
Among stocks in focus, Ambac Financial Group (ABK) plunged 56%
to 23 cents. The company filed for Chapter 11 bankruptcy protection
after the Internal Revenue Service questioned the accounting that
allowed the bond insurer to receive more than $700 million in tax
refunds. Ambac had already been warning investors that it cold face
bankruptcy when the IRS contacted the company in late October.
Priceline (PCLN) jumped 8.2%. The online travel agency's
third-quarter profit excluding items topped the company's August
forecast, and it projected fourth-quarter earnings and revenue
growth ahead of Wall Street's estimates.
Dean Foods (DF) tumbled 15%. The food-and-beverage company'
posted a 51% drop in third-quarter earnings, falling short of
analysts' estimates, as its dairy operations--the company's biggest
unit--struggled. Dean Foods also forecast fourth-quarter earnings
below consensus expectations, and the company said its chief
financial officer, Jack Callahan, was resigning and taking a CFO
job at a publicly traded company it didn't name.