Stocks ended relatively unchanged on Tuesday, a day after scoring their best rally in about two months over optimism that the United States is on track to resolve its fiscal cliff.
The Dow Jones industrial average closed at 12,788.51, down 7.45 points or less than 0.1 per cent. The broader S&P 500 closed at 1,387.82, up 0.93 points or less than 0.1 per cent. In Canada, the S&P/TSX composite index closed at 12,046.28, up 5.88 points or also less than 0.1 per cent.
The U.S. housing market continued to show signs of healing. Housing starts in October rose 3.6 per cent over revised figures for September, easily beating expectations among economists. While building permits fell 2.7 per cent from September, they were nearly 30 per cent above last year’s reading.
The report sent U.S. home builders higher. PulteGroup Inc. rose 5.4 per cent.
Ben Bernanke, chairman of the U.S. Federal Reserve, gave a relatively downbeat assessment of the U.S. employment landscape, in a speech in New York. “We have some way to go before the labour market can be deemed healthy again,” he said. He also warned that the U.S. would face a potential recession should politicians not agree on a budget plan to avert the fiscal cliff of automatic tax increases and spending cuts.
His comments hit major indexes earlier in the day.
Hewlett-Packard Co. fell 12 per cent after the computer maker said it would take an $8.8-billion (U.S.) writedown associated with its acquisition of Autonomy Corp. last year. The company also forecast disappointing first quarter earnings.
Intel Corp. fell 3.6 per cent and Alcoa Inc. fell 1.1 per cent. However, U.S. financials showed some strength: Bank of America Corp. rose 1.5 per cent.
Research In Motion Ltd. rose 1.2 per cent in Toronto after brokerage firm Jefferies & Co. raised its recommendation on the stock to “hold” and increased its target price to $10 (U.S.). Analyst Peter Misek argued that the BlackBerry maker’s upcoming operating system has been well received so far.
Key commodities retreated. Crude oil fell to $86.75 a barrel, down $2.53. Gold fell to $1,723.60 an ounce, down $10.80. Among Canadian commodity producers, Suncor Energy Inc. rose 1 per cent and Barrick Gold Corp. rose 0.2 per cent.