Stocks fall despite strong economic data
NEW YORK -- The stock market is having trouble extending its advance into a seventh month after news the manufacturing industry grew for the first time in more than a year.
Stocks fell Tuesday, giving up earlier gains after the Institute for Supply Management said its index of manufacturing activity rose to 52.9 in August, up from 48.9 in July and well above the reading of 50.5 analysts had been expecting.
A reading above 50 signifies growth in the industry — something that hasn't happened since January 2008.
Investors were expecting the improvement, and many may have decided to take some money out of the market, playing it safe ahead of the government's August employment report, which comes out Friday.
"The market's priced all of this in, and a lot more, quite frankly, I can't imagine a piece of fundamental information that could meaningfully impact this market upward or downward," said Jeff Buetow, managing partner at Innealta Portfolio Advisors.
Investors also got more evidence that the housing industry is rebounding. The National Association of Realtors said its index of pending U.S. home sales rose 3.2% in July to 97.6, more than the 96.5 forecast by analysts. It was the reading's highest level in more than two years, helped by a surge of first-time buyers taking advantage of a tax credit that expires this fall.
It was the sixth straight increase and 12% above the same month in 2008.
Bond prices were mostly lower. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.44% from 3.40% late Monday.
The dollar was mixed against other major currencies, while gold prices fell.
Oil prices added 60 cents to $70.56 a barrel on the New York Mercantile Exchange.
The upbeat reports on manufacturing and housing were also somewhat offset by a Commerce Department report that construction spending edged down slightly in July due to weakness in non-residential building and government projects. But home building had its best performance in 10 months.
