By Kristina Peterson
Energy and materials companies helped push U.S. stocks back into
the black Wednesday afternoon as commodity prices rose.
The small afternoon gains in stocks came despite a
bigger-than-expected drop in new-home sales for November. The
report had sent stocks into the red earlier in the session.
After hovering close to the flat line in the morning, the Dow
Jones Industrial Average rose 7 points to 10,471 in afternoon
trading. Alcoa (AA) led the measure, up 0.9%. DuPont (DD) was also
a strong performer, up 0.7%. Home Depot (HD) was down 1.3%.
The dollar dropped, as the U.S. Dollar Index (DXY), a measure of
the greenback against a basket of six currencies, was down 0.5% at
last check.
Crude-oil futures soared after U.S. oil and fuel inventories
dropped by more than expected, signaling that the long-awaited
tightening of supplies may finally be here. Consol Energy(CNX)
jumped 4.2%, while Massey Energy (MEE) rose 4.1% and Peabody Energy
(BTU) was also up 2.8%.
Treasurys rose, and the 10-year note's yield declined 2 basis
points to 3.74%, pulling back after closing on Tuesday at the
highest level since early August.
The Commerce Department reported that sales of single-family
homes decreased 11.3% to a seasonally adjusted annual rate of
355,000, the lowest level since April. The plunge wiped out much of
the gain made in the new-home market since the January bottom.
A separate report showed slight gains in personal income and
consumer spending, though the increases came in slightly below
expectations. The personal consumption expenditures price index
rose 0.2% in November compared to October.
Bernie McGinn, CEO of McGinn Investment Management, predicted
consumer spending would continue to gain throughout the holiday
season.
"People may go and spend the extra dime this year because they
certainly didn't last year," he said. "Profits will be stronger
because the companies are lean and mean."
The report's final consumer sentiment index moved to 72.5 from
67.4 in November. It was expected to come in at 73.5.
Metals futures were also higher, lifting a number of materials
companies including Newmont Mining (NEM), which rose 3.4%, and
Freeport-McMoRan Copper & Gold (FCX), which climbed 2.7%.
Ford Motor (F) said it's agreed to all the substantive terms
over the sale of its Volvo unit to Zhejiang Geely Holding Group.
Ford expects to finalize the agreement by the end of the first
quarter of 2010, though financing details and government approval
still need to be worked out before a deal can be signed. Ford was
recently up 0.9%.
Shares of Micron Technology (MU) rose 5.4% after the company
said late Tuesday it swung to a profit, helped by strong sales of
memory processors.
Corporate-uniform maker Cintas(CTAS) tumbled 11%. Its fiscal
second-quarter results missed expectations as high unemployment cut
into the need for uniforms.