Closing Bell: Stocks Give Up Early Gains Over Turmoil in Egypt

DailyFinance Staff
Updated
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U.S. stocks reversed early gains Tuesday, after news reports of political turmoil in Egypt overshadowed upbeat news about the nation's economy.

News that Egypt's military had drawn up plans to suspend the country's constitution, dissolve its legislature and set up an interim government ended a rally driven by good news about U.S. car sales, home prices and manufacturing.

The Dow Jones industrial average (^DJI) lost 42 points (0.3 percent) to end the day at 14,932, while the S&P 500 (^GPSC) declined less than a point to 1,614 and the Nasdaq (^IXIC) dropped 1 point to 3,433.

U.S. buyers snapped up new cars and trucks in June at a pace not seen since before the recession. Continuing demand for big pickups helped boost sales for Detroit's automakers. Ford said its sales rose 14 percent, while Chrysler gained 8 percent and General Motors rose 6.5 percent. Among Japanese carmakers, sales at Nissan sales jumped 13 percent, while Toyota and Honda each saw theirs rise 10 percent. South Korea's Hyundai reported a record June, with sales up 2 percent.

U.S. home prices jumped 12.2 percent in May from a year ago, the most in seven years. Data provider CoreLogic said Tuesday that home prices rose from a year ago in 48 states, falling only in Delaware and Alabama. And all but three of the 100 largest cities reported price gains.

Orders to U.S. factories rose in May, helped by a third straight month of stronger business investment. The gains suggest manufacturing may be picking up after a weak start to the year.

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The CEO of an California-based mortgage-services firm has been sentenced to more than three years in prison for running a Ponzi scheme that bilked more than $6.7 million from more than two dozen investors. The U.S. Attorney's office said David Lee Hardin Jr., 59, was also ordered to pay $1.5 million in restitution at his sentencing Monday. Hardin is the CEO and majority shareholder of a group of companies, including Covenant Mortgage, Covenant Marketing, Covenant Debt Solutions, Covenant Insurance and HRE Mortgage.

A former Tiffany & Co. (TIF) executive is accused of stealing 164 items, including diamond bracelets, earrings and rings, from the iconic jeweler's midtown Manhattan headquarters, and reselling them for more than $1.3 million. Former vice president of product development Ingrid Lederhaas-Okun was arrested at her home in Darien, Conn. She was to appear later in the day in federal court in Manhattan to face charges of wire fraud and interstate transportation of stolen property.

Dish Network (DISH) is offering free, live TV to passengers of Southwest Airlines (LUV). Dish will pay for the service, viewed on customers' own Internet devices, until the end of the year. Southwest had been offering a similar service on its flights for $5 a day. The deal doesn't include Internet access, however, for which Southwest charges $8 a flight.

The Federal Trade Commission said it has fined billionaire Barry Diller $480,000 tied to complaints that he didn't submit the required regulatory filings when he acquired voting shares in the Coca-Cola (KO) in 2010 and 2012.

Among stocks making big moves:

  • Achillion Pharmaceuticals (ACHN) fell $2.09, or 25 percent, to $6.27 after the drug developer said regulators Monday placed a hold on an early stage study involving its potential hepatitis C treatment.

  • DaVita HealthCare Partners (DVA) fell $7.10, or 5.9 percent, to $114.05, after the government proposed cutting the rates of Medicare payments to dialysis service providers.

  • General Motors (GM) and Honda Motor (HMC) are joining forces to develop hydrogen fuel cell vehicles. The two companies said they plan to develop new hydrogen storage and fuel cell technologies by 2020, and also push for more hydrogen fueling stations.

  • SanDisk (SNDK) is spending $307 million to acquire Smart Storage Systems, a developer of enterprise solid-state memory drives. Smart Storage has been owned since 2011 by investment-firm Silver Lake Partners. SanDisk shares gained 0.3% to end the day at $61.59.

  • U.S. automaker Ford Motor (F) got a boost after reporting its best June sales since 2006. Shares of the Dearborn, Mich.-based automaker rose 44 cents, or 2.8%, to $16.18. Ford said sales rose 13% in June on big gains in sales of pickups and small cars.

  • Zynga's decision to hire Microsoft's Don Mattrick as CEO sent the troubled online gaming company's stock higher for the second day as one analyst called it "too strange not to be true" but also "a bit odd." Zynga (ZNGA) stock added 20 cents to end at $3.27. Mattrick, who hails from Microsoft's (MSFT) interactive entertainment division, which houses the Xbox, starts his new job Monday. Mark Pincus, who founded Zynga in 2007, will remain chairman and chief product officer.

  • French authorities have confirmed that investigators raided Apple stores across France last week as part of an ongoing probe. The agency in charge of the investigation said it is scrutinizing Apple's relationships with its distributors, following complaints that the company favors its own stores at the expense of independent distributors. Apple (AAPL) stock rose $9.27 to $418.49.

  • A New York judge has refused to dismiss the state attorney general's lawsuit claiming back sales taxes and triple damages from Sprint Nextel (S). The court says the state has a valid basis for claims under state tax law, which imposes a 4 percent tax on aggregated mobile communications services. Sprint, which is being acquired by China's SoftBank, rose about 1% to $7.14.

What to watch Wednesday:

  • U.S. markets close at 1 p.m. ET in advance of Thursday's Fourth of July holiday, when markets are closed. The New York Stock Exchange and other bourses resume normal trading hours Friday.

  • Payroll-processor ADP releases data on private-sector hiring for June at 8:15 a.m.

  • The Labor Department reports weekly jobless claims at 8:30 a.m. (The release is normally scheduled for Thursdays but was moved ahead a day because of the July Fourth holiday.)

  • At 10 a.m., Freddie Mac releases weekly mortgage rates, and the Institute for Supply Management releases its service sector index for June.


Compiled from staff and wire reports.

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