Stocks waver as quarter ends
NEW YORK -- Stock prices fluctuated in a narrow range Tuesday as investors made last-minute portfolio adjustments as the end of the quarter approached.
The mood in the market was upbeat after a report that consumer confidence grew more than expected in March, although it's still well below historical levels that indicate a strong economy. A separate report showed home prices inched higher for the eighth consecutive month.
Analysts expect trading to be erratic the next two days. At the end of a quarter, institutional investors typically engage in what's known as window dressing, or trades intended to boost returns on reports sent to shareholders. Many also refrain from big moves. Tuesday's volume was also light as many traders took the day off for Passover or in advance of Easter.
A slow, steady climb higher in stocks over the past two months is also giving investors reasons to collect some profits at the end of the quarter.
"A bout of profit-taking would be normal and expected after the rise we had," said Mitch Schlesinger, managing director of FBB Capital Partners in Bethesda, Md. With one day left in the quarter, the Dow Jones industrial average is up 4.5 percent for the period. That's a sizable gain and puts the market on pace for a strong year.
The day's economic reports followed a recent trend in data that shows the economy is improving, albeit slowly. Investors have reacted positively to similar reports in recent weeks. The Dow has risen in 18 of the past 22 days and is now at its highest level since September 2008. It was up by as much as 44 points in morning trading before the gains evaporated.
The Conference Board said its consumer confidence index rose to 52.5 in March, from 46.4 last month. Economists polled by Thomson Reuters had forecast it would rise to 50.
While the reading would indicate improvement, it is far from signaling a healthy economy. A reading above 90 means the economy is on solid footing.
"We're starting to see consumers come back in an adequate manner," said Larry Rosenthal, president of Financial Planning Services in Manassas, Va. "Not strong, but adequate."
In afternoon trading, the Dow fell 5.52, or 0.1 percent, to 10,890.34. The Standard & Poor's 500 index fell 1.57, or 0.1 percent, to 1,171.75, while the Nasdaq composite index fell 0.60, or less than 0.1 percent, to 2,403.76.
About four stocks fell for every three that rose on the New York Stock Exchange, where volume came to a very light 508.7 million shares.
The Standard & Poor's/Case-Shiller home price index, which measures home values in 20 major metropolitan markets, rose 0.3 percent in January compared with the previous month. It was the eighth consecutive monthly gain. The index is up nearly 4 percent from its bottom in May 2009, showing home prices are starting to slowly recover.
The index was down 0.7 percent compared with the year-ago period, slightly better than the 0.8 percent drop forecast by economists.
Unlike other sectors of the economy, the housing market has been less consistent in its recovery. Reports on sales, defaults and prices have shown an uneven rebound.
The market has been tolerant of the erratic housing reports, and instead has mostly focused its attention on the strength of the consumer and jobs data. Analysts say stocks and consumer confidence won't be able to push higher without evidence that the housing and job markets are improving and not just stabilizing.
The Labor Department releases its monthly employment report Friday. Economists expect it to show employers added 190,000 jobs in March, only the second increase since the recession began in 2007. Some of the jobs growth is expected to be tied to temporary government hiring for the 2010 census, which is currently under way.
With the market closed Friday after the jobs report comes out, investors might pay more attention to Wednesday's jobs report from payroll company ADP. Economists forecast ADP's report will show private-sector employers added 40,000 jobs in March.
The ADP report is seen as an early indicator of the Labor Department's data, though there are often wide variations.
In corporate news, Apple Inc. and Verizon Communications rose sharply after reports that Apple was making phones that could be used on Verizon's network.
Apple shares rose $3.12 to $235.51. Earlier in the session, shares hit a record high of $237.48.
Verizon shares jumped 80 cents, or 2.6 percent, to $31.25. Qualcomm Inc., which is the predominant manufacturer of the style of chips used in Verizon phones, rose 31 cents to $42.07.
Bond prices were little changed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was flat at 3.87 percent compared with late Monday.
The dollar inched higher against most other major currencies. Gold and oil both fell.
The Russell 2000 index of smaller companies fell 1.76, or 0.3 percent, to 680.49.
Overseas, Britain's FTSE 100 fell 0.7 percent, Germany's DAX index dipped 0.2 percent, and France's CAC-40 fell 0.3 percent. Japan's Nikkei stock average rose 1 percent.