Stocks erased losses to trade higher Tuesday afternoon after a Federal Reserve official said economic data remained too mixed for policy makers to lay out a detailed path for reducing and eventually halting the central bank’s asset-purchase stimulus plan at their September meeting.
In afternoon trading, the Standard Poor’s 500-stock index was 0.3 percent higher, the Dow Jones industrial average gained 0.4 percent and the Nasdaq composite was 0.3 percent higher.
The remarks were made by Dennis Lockhart, president of the Federal Reserve Bank of Atlanta. The speech appeared to reassure investors fearing that the Fed would soon taper its asset purchases, which total $85 billion a month. The markets, which had been lower through the morning, quickly turned positive.
Homebuilder stocks, however, came under pressure as government bond rates rose, making mortgages less affordable.
PulteGroup, a home construction company, fell 2.3 percent, and another homebuilder, Lennar, fell 2 percent.
Airline stocks fell after the Justice Department filed suit to block the merger of US Airways and American Airlines parent AMR Corp.
US Airways fell 10.1 percent. Shares of Delta Air Lines fell 9 percent and United Continental stock dropped 6.1 percent.
The market “is a lot like yesterday with traders seeing low volume. But the good news is we’re not seeing a massive sell-off and the general tone of the markets is still positive,” said Ryan Detrick, a senior technical analyst at Schaeffer’s Investment Research in Cincinnati.
He said the current trend could continue until September.
J.C. Penney shares fell after initially rising on news that William A. Ackman, the activist investor, had resigned from its board on Monday.
“This is a clear victory” for the board the chief executive, Myron Ullman, said Steve Kernkraut, a portfolio manager at Durban Capital in New York. “It also gives the board a reasonable time frame to recruit a long-term C.E.O.”
“Many C.E.O. candidates would refuse to work with Ackman on the board, so this clears the deck,” he added.
J.C. Penney shares resumed their downward trajectory, falling 3.1 percent.
Shares of travel Web site Orbitz were down over 12 percent after one of its largest investors, PAR Capital Management, said it sold 8.1 million of its 24.6 million-share stake in the company. Orbitz was the biggest percentage loser on the New York Stock Exchange.
The Commerce Department said retail sales rose 0.2 percent in July, while a narrower gauge — retail sales excluding cars, gasoline and building materials — rose at its fastest pace in seven months.
The core retail sales number could signal quicker economic growth and strengthen the case for the Federal Reserve to curtail stimulus efforts in September.
Even though the S. P. has fallen in five of the past six sessions, the average is just 1.6 percent from an all-time closing high reached on August 2. Since July 11, the S. P. has traded in a narrow range of about 2 percent.
Yum Brands fell 2.7 percent a day after the fast food chain operator said July China sales slid 13 percent.
Eli Lilly and Company rose 4 percent after it said its experimental lung cancer drug increased survival in a late-stage trial.
Digital Generation soared 23 percent a day after it agreed to sell its television business for $485 million.
Overseas shares were higher. The FTSE Eurofirst 300 index of blue chip European stocks ended the trading session up 0.6 percent. In Asia, Japan’s Nikkei closed up 2.6 percent, and China’s Shanghai composite rose 0.2 percent.
Article source: http://www.nytimes.com/2013/08/14/business/daily-stock-market-activity.html?partner=rss&emc=rss