U.S. Stocks Fluctuate as House-Prices Drop, Commodities Rally
Sept. 22 (Bloomberg) — U.S. stocks fluctuated, with benchmark indexes hovering near four-month highs, as a drop in home prices and forecasts at technology companies that disappointed investors offset a rally in commodity producers.
Adobe Systems Inc., the top maker of graphic-design software, tumbled 21 percent. PMC-Sierra Inc. slumped 7.6 percent as the chipmaker reduced its third-quarter sales forecast. Newmont Mining Corp. gained 2.1 percent as gold rose to a record. Exxon Mobil Corp. and Chevron Corp. added as much as 0.8 percent as oil prices advanced before a report forecast to show U.S. inventories dropped for a third week.
The Standard & Poor’s 500 Index slipped less than 0.1 percent to 1,139.45 at 10:26 a.m. in New York, a day after the Fed said it’s willing to ease monetary policy further to spur growth. The Dow Jones Industrial Average rose 0.1 percent to 10,769.74.
“We’re navigating the slow-growth economy and trying to avoid pitfalls,” said Jack Ablin, chief investment officer at Chicago-based Harris Private Bank, which oversees $55 billion. “The Fed will do whatever it can to avoid a double dip, but it can’t keep on buying debt forever.
This is a ‘reflation’ story of weaker dollar, higher commodities and lower interest rates. This is not an environment that suggests a huge rally for stocks.”
The S&P 500 has surged 12 percent from this year’s low on July 2 as concern eased that U.S. unemployment and less spending from indebted European nations would stall the global economic recovery. The gauge has gained 2.5 percent so far this year, leaving it 6.1 percent below its peak for 2010.
Treasuries Rally
Treasuries rose for a fourth day. The gains drove the yield on the 10-year note to as low as 2.52 percent, the least since Sept. 1. Two-year yields fell to 0.4074 percent, the lowest ever, after the Fed said that it’s “prepared to provide additional accommodation if needed to support the economic recovery.” The central bank is scheduled to buy Treasuries due from March 2013 to August 2014 today as part of its effort to keep borrowing costs low.
Adobe, PMC
Adobe tumbled 21 percent to $26.20 after the company yesterday said fourth-quarter revenue will be $950 million to $1 billion, citing slower demand from back-to-school shoppers and Japanese buyers. Analysts surveyed by Bloomberg had projected sales of $1.03 billion on average for the period, which lasts through November.
PMC-Sierra lost 7.6 percent to $7.20. The chipmaker reduced its third-quarter sales forecast, saying it expects $163 million at most. That trails the average analyst estimate of $173.5 million in a Bloomberg survey.
Newmont Mining, the largest U.S. gold producer, gained 2.1 percent to $65.48. Gold climbed to a record in London and New York as the Fed’s willingness to increase its balance sheet triggered a slump in the dollar. The U.S. currency declined as much as 1 percent to $1.3396 against the euro.
