U.S Stocks Turn Lower; Facebook Weighs On NASDAQ
-General Motors, Home Depot among gainers; Facebook; Apple down
SAN FRANCISCO (MarketWatch) — U.S. equities turned lower Wednesday, with a post-Hurricane Sandy boost in Home Depot Inc.’s stock failing to provide much support for the Dow industrials, and Facebook Inc. shares a drag on the Nasdaq Composite.
“Look for more increased volatility today as we get the ‘compression effect’,” said Keith Springer, president of Springer Financial Advisors in Sacramento, Calif. “We may get three trading days packed into one.” Read: Power, transit woes plague East Coast after Sandy.
The Dow Jones Industrial Average (DJI:DJIA) shed 13.71 points, or 0.1%, to 13,093.63, after trading as high as 13,189.08. It’s trading around 2.6% lower for the month.
Trading had started on a “positive note with equities headed higher, likely due to the positive news out of Europe and the reaction to some recent earnings reports out of the likes of Ford, GM and BP,” said Ryan Wibberley, president and founder of CIC Wealth Management Group.
Home Depot Inc. (NYSE:HD) shares climbed 1.7% — ranked as the top gainer in the blue-chip benchmark, which is trading around 1.9% lower for the month. Insurance firm Travelers Cos. (NYSE:TRV) shares fell 0.8%.
“Stocks in the housing/construction/industrial sectors, like Home Depot, Lowe’s Cos. (NYSE:LOW) , Owens Corning (NYSE:OC) , are on the rise because these companies will likely benefit from the rebuilding that will follow in the Northeast after Hurricane Sandy,” said Wibberley.
But “insurance companies are likely to be under some pressure today as market participants try to sort out how much of an earnings hit these companies will take in the fourth quarter, due to the massive destruction in the New York/New Jersey area,” he said in emailed comments.
General Motors (NYSE:GM) saw third-quarter earnings per share of 93 cents, excluding one-time items. Analysts had expected GM to earn 60 cents a share, according to the consensus compiled in a survey by FactSet Research. Shares of the company rose 7.1%.
Down about 2.3% for the month, the S&P 500 index (SNC:SPX) lost 3.52 points, or 0.2%, to 1,408.42, with information technology and health-care falling the most and utilities a stand out as the best performer among its 10 sectors.
The Nasdaq Composite (NASDAQ:COMP) fell 20.66 points, or 0.7%, to 2,967.29, trading 4.8% lower month to date.
Shares of Facebook (NASDAQ:FB) fell 3.2% as the post-initial public offering lockup on about 229 million shares expired, making them available to the open market.
Apple Inc. (NASDAQ:AAPL) saw its stock lose 2.1% as investors reacted to a high-level management shake-up that included the impending departure of Scott Forstall, head of the company’s iOS mobile operating system. See: Apple, Facebook fall, but Microsoft rises.
Hurricane Sandy prompted a two-day shutdown of the NYSE, with New York City and the East Coast hit hard by the storm on Monday evening.
Decliners slightly outpaced advancers on the NYSE, where 217 million shares traded as of 11:15 a.m. Eastern. Composite volume neared 1.1 billion.
U.S. data out Wednesday showed that the Chicago PMI business barometer edged up in October to 49.9% from 49.7% in the prior month, but remained below the key 50% mark for the second straight month. Readings below 50% indicate contraction.
Some key releases this week include jobless claims and the ADP national employment report on Thursday as well as the Labor Department’s October jobs data Friday.
Friday’s nonfarm payroll figures will be a consideration, “as we head to the polls next Tuesday,” said Wibberley, referring to the U.S. presidential election.
“The rebuilding of the Northeast is likely to stoke the view that the economy will get a shot-in-the-arm and that many businesses will be looking to hire, at least for the short-term,” he said.