Markets: News  

Blue-chip stocks down a second day; Nasdaq up

NEW YORK (MarketWatch) -- Blue-chip stocks fell Tuesday for a second session, while the Nasdaq Composite finished slightly higher on low volume as investors weighed mixed economic reports and took a cautious stance ahead of potential central-bank moves.

"We are suggesting to our investors that they view last week and this week with a cautious eye. Volumes are really low, and a lot of seasoned traders and professionals are on vacation," said Brad Sorensen, Charles Schwab's director of market and sector analysis.

"It'll heat up with Jackson Hole and the Europeans meeting next week," he added of the Federal Reserve's annual symposium in Wyoming and the European Central Bank meeting next Thursday.

The Dow Jones Industrial Average (DJIA) shed 21.68 points, or 0.2%, to close at 13,102.99.

The S&P 500 Index (SPX) slipped 1.14 points, or 0.1%, to 1,409.30, with consumer sectors faring best and telecommunications the heaviest weight among its 10 industry groups.

"We are stuck in a narrow range now between 1,398 and 1,426," Elliot Spar, market strategist at Stifel Nicolaus, wrote in afternoon comments.

"If the market doesn't like what it hears from the [European Central Bank] on Sept. 6, I expect the downside of the range to be broken," he added.

The Nasdaq Composite Index (COMP) rose 3.95 points, or 0.1%, to 3,077.14, extending Monday's 3.4-point rise.

For every three stocks declining, four gained on the New York Stock Exchange, where composite volume approached 2.6 billion.

The price of oil rose as Isaac, now a full-fledged hurricane, cut production in the Gulf of Mexico, with crude futures for October delivery (CLV2) climbing 0.9% to end at $96.33 a barrel in New York. Read about gas prices and the impact from Hurricane Isaac.

The U.S. dollar (DXY) fell against other global currencies, including the euro. Treasury prices gained, with the 10-year note yield (10_YEAR) declining to 1.64%. Read more on bonds.

Countdown to Ben

ECB President Mario Draghi canceled his Saturday speech in Jackson Hole, citing work ahead of the ECB's meeting. That leaves Fed Chairman Ben Bernanke's address on Friday as the headline event.

The Fed chief is unlikely to signal a big monetary-policy move from Wyoming, with whatever action the central bank might take at its September meeting still dependent on upcoming economic data, Schwab's Sorensen said.

Besides, further monetary easing will not lift the uncertainty that comes with the failure of politicians to address the nation's fiscal policy, he added, reiterating Bernanke's repeated call for action by lawmakers.

"Liquidity really isn't the problem; there is plenty of liquidity out there. Corporate balance sheets show a lot of liquidity and cash, but they are apparently not willing to invest in capital and labor," Sorensen remarked of worries about the so-called fiscal cliff and future tax rules. "They have to know what the rules of the game are."

U.S. economic reports were mixed. The S&P/Case-Shiller index of property values in 20 cities rose 0.5% in June from the year-earlier period, the first such gain in nearly two years. Read more about home prices.

Separately, the Conference Board's index of consumer confidence declined in August to a nine-month low, with the private research group's data illustrating pessimism about job prospects and the economy. Read more on consumer confidence.

The sentiment reading should be taken with a large grain of salt, since there's often a big gap between what people say and what they do, according to Sorensen, who added that chain-store sales results provide more telling information.

In Europe, the National Statistics Institute in Madrid on Tuesday reported Spain's recession grew worse in the second quarter, with the euro member's gross domestic product falling 0.4% from the first quarter.