Markets Lose Steam After Early Rally
Markets had a nice rally early in the day on improved housing and consumer confidence, but the positive vibes didn't last, and markets have now moved into negative territory. The Dow Jones Industrial Average (INDEX: ^DJI) has fallen 0.34%, and the S&P 500 is down 0.54% near the end of the trading day.
The first positive indicator was a 1.6% increase in the S&P/Case-Shiller Home Price Index for July, following a 2.3% gain in June. Rising home prices are perhaps the most important indicator that we can start turning the page from the Great Recession to a state of steady growth. Housing was a big part of the crisis, and signs that it is stabilizing are good for everyone.
Further, the Consumer Confidence Index rose to 70.3 in September, up from 61.3 in August. We haven't seen this level since February, and, like housing, it's an incremental sign that consumers are willing to spend again.
But that wasn't enough to keep stocks from falling overall. Caterpillar (NYS: CAT) sank 3.1% after it cut guidance due to the weak economy. Alcoa (NYS: AA) , a stock that has traded along with Caterpillar for weeks, also fell on worries that the weak economy would dampen demand.
Hewlett-Packard (NYS: HPQ) fell 1.6% after it lost a case involving its research tax credit. The Tax Court backed the IRS in a dispute with the company, which will now owe tens of millions of dollars in taxes.
In other corners of the market, oil fell 0.4% in late trading, while gold has climbed slightly. The "risk off" trade is clearly on again as investors wait for the start of an all-important earnings season.
One of the reasons markets have begun to move sideways is the upcoming presidential election and uncertainty surrounding policy. Well, weâve identified three stocks that could skyrocket after the election, and you can find out their names for free by clicking here.
The article Markets Lose Steam After Early Rally originally appeared on Fool.com.
Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
