Tuesday November 17, 08:23 PM
US STOCKS-Wall Street flat as retailers' views spark caution
By Ellis Mnyandu
NEW YORK, Nov 17 (Reuters) - U.S. stocks were little
changed on Tuesday as outlooks from Target and Home
Depot sparked caution about holiday spending, offsetting
upbeat broker views on Microsoft (NASDAQ: MSFT
- news) and Exxon Mobil (NYSE: XOM - news) .
Investors were generally reluctant to bid stocks higher, a
day after key indexes soared to fresh 13-month highs and the
benchmark S&P 500 hit a major technical milestone,
closing above the psychologically important 1,100 level.
Weak outlooks for the key holiday season weigh on investor
psychology since consumer spending accounts for about
two-thirds of U.S. economic activity.
'It feels more like a pause to refresh than the beginning
of a downturn,' said Eric Kuby, chief investment officer at
NorthStar Investment Management Corp in Chicago.
'The news from retailers wasn't particularly good. It seems
to me the major flavor for today is once again, the market
participants questioning the strength of the recovery.'
The Dow Jones industrial average gained 12.85
points, or 0.12 percent, to 10,419.81. The Standard & Poor's
500 Index shed 1.17 points, or 0.11 percent, to
1,108.13. The Nasdaq Composite Index rose 1.92 points,
or 0.09 percent, to 2,199.73.
Home Depot (NYSE: HD - news) , the leading U.S. home improvement chain,
reported quarterly results that beat analysts' estimates, but
its outlook suggested weaker results at the end of the year and
it predicted no meaningful recovery until the second half of
2010. For details, see
The stock, a Dow component, was off 3 percent at $26.83.
Target Corp, the No. 2 U.S. discounter, forecast a
holiday quarterly profit that could fall short of Wall Street's
estimates, saying early November (Frankfurt: A0Z24E - news) results showed tepid consumer
demand.
The stock dropped 2.9 percent to $48.81, while the S&P
consumer discretionaries index shed 1 percent.
Data showing that U.S. industrial output rose less than
expected in October was another headwind, overshadowing news
that the Producer Price Index, a gauge of wholesale inflation,
was tame last month.
Even so, shares of software maker Microsoft Corp
gained 2 percent to $29.99 after Morgan Stanley (NYSE: MS - news) raised its
price target on the stock and said it was upbeat on the
prospects for Windows 7 and on the company's holiday season.
Shares of Exxon Mobil rose 0.6 percent to $74.86 after
Barclays (LSE: BARC.L - news) raised its recommendation on the stock to 'overweight'
from 'equal-weight.'
Monday's strong run-up extended the broader market's
recovery since the S&P 500's 12-year closing low of early
March. That benchmark index is up 63.5 percent since then.
(Editing by Jan Paschal)
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