MW: U.S. stocks pare losses after Chicago manufacturing data
By Donna Kardos Yesalavich, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks fell Wednesday, led by the materials and financial sectors, though the declines were limited as data on Chicago-area manufacturing came in better than expected.
The Dow Jones Industrial Average (INDU 10,542, -3.55, -0.03%) was down 11 points, or 0.1%, to 10,535 in recent trading. Before the Chicago manufacturing data, the measure had been off nearly 40 points. General Electric Co. (GE 15.31, -0.13, -0.84%) was the Dow's worst performer, off 0.8%.
Alcoa Inc. (AA 15.99, -0.04, -0.25%) was also weak, along with financial components Bank of America Corp. (BAC 15.07, -0.05, -0.33%) and American Express Co. (AXP 40.64, -0.24, -0.59%) . Alcoa slipped 0.6%, while Bank of America fell 0.5% and American Express declined 0.6%.
The Nasdaq Composite Index (COMP 2,291, +2.73, +0.12%) edged up 1 point. The Standard & Poor's 500 Index (SPX 1,125, -0.73, -0.06%) declined 0.2%, with every sector except technology in the red. The materials sector was the S&P 500's worst-performing category, while financials weren't far behind. The slump in the materials sector came as gold futures fell.
The financial sector's declines followed a Wall Street Journal report on GMAC Financial Services that reminded investors of the sector's remaining troubles. The Journal report said GMAC is close to getting $3.5 billion in fresh government aid, on top of the $12.5 billion in support it's already received.
In other markets, the dollar strengthened against both the euro and the yen. Treasurys also edged higher, up 1/16 recently at 3.797%. Crude-oil futures inched higher ahead of government inventories data.
The action comes after stocks fell slightly Tuesday, snapping a six-session winning streak despite data that showed the highest level of consumer confidence since December 2007 and the slowest year-on-year house-price decline in two years. However, volume was particularly light, and traders cautioned against interpreting much from the market's moves Tuesday.
Trading volume is expected to be even lighter for the rest of the week ahead of the New Year's Day holiday Friday.
The Chicago Purchasing Managers Index, a measure of manufacturing activity in the Chicago area, came in at 60 for December, above November's measure of 56.1 and expectations for 55.5.
Among stocks in focus, Aetna Inc. (AET 32.39, -0.47, -1.43%) shares fell 1.1% after the health insurer said it will take a fourth-quarter charge of about $60 million to $65 million. The charge is to account for previously announced job cuts and real estate consolidations, as well as workforce reductions in the first quarter of 2010.
Still to come Wednesday are data on manufacturing activity in the Federal Reserve Bank of Kansas City's district and the final U.S. government auction of the year, $32 billion in 7-year notes.
