Stocks rose on Tuesday, shaking off early declines after investors fretted over the issue of the U.S. debt ceiling.
The S&P 500 closed at 1472.34, up 1.66 points or 0.1 per cent. The blue-chip Dow Jones industrial average closed at 13,533.58, up 26.26 points or 0.2 per cent. In Canada, the S&P/TSX composite index closed at 12,641.97, up 38.88 points or 0.3 per cent.
The moves follow mixed economic news. A preliminary estimate on German economic growth in the fourth quarter showed a contraction of 0.5 per cent, threatening Europe’s biggest economic power with a recession.
In the United States, the Empire State survey of manufacturing activity in January slumped 7.8 points, well below expectations for a flat reading.
However, U.S. retail sales were a bright spot: Sales rose 0.5 per cent in December over the previous month, beating economists’ expectations for 0.2 per cent growth and suggesting that the debate in Washington over the so-called “fiscal cliff” did little to blunt consumption demands.
Earlier, Fitch Ratings had warned that any delay in raising the U.S. debt ceiling would lead to a formal review of the country’s credit rating – rattling nerves not long after investors celebrated the end of the so-called “fiscal cliff” debate.
Once again, technology stocks dominated the day’s action. Dell Inc. rose 7.2 per cent, continuing a rally that began on Monday following reports that the company is considering going private, with the help of two private equity firms. At least two analysts have raised their target prices on the stock amid the buyout speculation.
However, Apple Inc. continued its slump. It fell 3.2 per cent, making it the biggest laggard within the S&P 500. It fell decisively below the $500 (U.S.) mark, closing at $485.92, or its lowest level in more than 11 months. Concerns are growing that the company will sell fewer iPhones than expected, while rising competition in the smartphone market will weigh on profit margins.
The two-day rally in Research In Motion Ltd. came to a halt, with shares in the BlackBerry maker closing down 2.9 per cent on the TSX at $14.27.
Facebook Inc. fell 2.7 per cent after it unveiled a new search tool, disappointing some expectations that the social media company was entering the smartphone market.
In Canada, Lululemon Athletica Inc. fell 6.1 per cent after its quarterly sales projections missed analysts’ expectations.
Among key commodities, gold rose to $1,683.90 an ounce, up $14.50. Crude oil fell to $93.28 a barrel, down 86 cents.
Among Canadian commodity producers, Suncor Energy Inc. rose 0.5 per cent and Barrick Gold Corp. rose 1.1 per cent.Report Typo/Error