US blue-chip stocks fell on Tuesday, with Chevron and Exxon Mobil among the decliners as crude-oil futures slipped. But the broader Standard & Poor's 500 index edged into positive territory after materials companies including Alcoa and consumer-discretionary stocks such as Home Depot staged late rallies.
The Dow Jones Industrial Average fell 22.82 points (0.23%) to 10,043.75. With crude-oil futures falling to below $69 a barrel, Chevron lost 87 cents (1.2%) to $72.57, while Exxon Mobil slipped 48 cents (0.8%) to $59.71.
Kraft Foods was the Dow's weakest component, down 56 cents (1.9%) to $28.37. Coca-Cola was also weak, off 84 cents (1.6%) to $50.62, and Wal-Mart Stores slid 72 cents (1.4%) to $50.28.The declines in the consumer-staples components came as consumer-discretionary stocks rose on a better-than-expected reading of consumer confidence and a 2% year-over-year increase in first-quarter home prices. Home Depot was the Dow's top performer with a jump of 76 cents (2.3%) to $33.98.
Materials stocks also rose as some investors saw the recent declines in the sector and the underlying metals as overdone. Shares of aluminium giant Alcoa advanced 21 cents (1.9%) to $11.30.
Continued concerns over the European financial system and worries about tensions on the Korean peninsula weighed on the market on Tuesday. The Nasdaq slipped 2.60 (0.12%) to 2,210.95. The S&P 500 edged up 0.38 (0.04%) to 1,074.03. The consumer-staples sector led the measure's declines, which were offset by the gains in materials and consumer-discretionary stocks.
Genzyme jumped $2.68 (5.5%) to $51.16, after the Food and Drug Administration approved a new version of a Genzyme drug designed to treat a rare illness known as Pompe disease. The drug, Lumizyme, is similar to the company's existing drug Myozyme, which was approved in 2006.
AutoZone added $10.32 (5.6%) to $194.57. The auto-parts retailer's fiscal third-quarter earnings jumped 17%, beating analysts' estimates, as same-store sales and store openings drove top-line growth and margins widened. The results also helped lift shares of rivals Advance Auto Parts and O'Reilly Automotive. Advance Auto Parts rose $1.48 (3%) to $51.03, while O'Reilly climbed $1.89 (4%) to $49.49.
Avnet slipped 12 cents (0.4%) to $27.38, after the distributor of semiconductors and other electronic components announced it launched a takeover bid for electronics-component distributor Unidux to expand its business and customer base in the Japanese market.
EMC Corp. declined 21 cents (1.2%) to $17.85. A broker cut its investment rating on the stock to neutral from overweight, saying it continues to think the supertanker company's stock is a core holding for long-term investors but that it doesn't see a lot of potential for top and bottom-line growth this year and next.
For Australian ADRs listed on the NYSE, BHP Billiton increased 12 cents (0.2%) to US$61.62, Rio Tinto Plc rose 78 cents (1.85%) to US$42.86, ResMed lost 9 cents (0.14%) to US$62.01, Telstra Corporation dipped 25 cents (2.05%) to US$11.95, Telecom Corporation of NZ declined 25 cents (3.79%) to US$6.35 and Westpac slid $1.90 (2.02%) to US$92.30.
In economic news, The Conference Board's index of consumer confidence jumped to 63.3 for May from a revised 57.7 in April, the highest level since August 2007.
US home prices rose 2% in 1Q from prior-year lows, according to the S&P Case-Shiller, the first year-to-year increase in several years. However, prices were down 3.2% from the end of last year as tax incentives drew to a close and foreclosures continued to rise.
At 7:45 AM (AEST), the 10-year Treasury note yield was 3.16% and the five year yield was 1.97%.
European shares closed at a level not seen for more than eight months on Tuesday, as rising concerns about economic growth and bank balance sheets pummelled sentiment while pushing peripheral markets into bear-market territory.
After opening the week with a 0.4% advance, the Stoxx Europe 600 index skidded 2.5% to close at 232.11 - its lowest close since September 3.
Banks, closely tied to economic growth, were slammed in Tuesday's trading, with elevated interbank lending levels reflecting investor sentiment toward the sector.
Shares of Credit Agricole tumbled 6.7%, Barclays dropped 5.7% and Deutsche Bank fell 2%.
Hopes of a sustainable economic recovery in Europe have been threatened recently by sovereign debt levels of peripheral countries and equity
indexes in the so-called PIIGS countries - Portugal, Ireland, Italy, Greece and Spain - which fell into bear-market territory on Tuesday.
It's not just general worries about the economy that are hitting the banking sector, though, after the Spanish government seized one of its savings banks over the weekend and four Spanish savings banks unveiled a merger deal late on Monday. BBVA dropped 4.6% in Madrid.
Of the major regional European equity markets, the French CAC-40 index fell 2.9% to close at 3,331.29 and the German DAX index dropped 2.3% to end at 5,670.04. The UK's FTSE 100 index also sank, falling 2.5% to settle at 4,940.68 and surrendering the 5,000 level for the first time since last November.
Shares of miners slumped in European trading, with Kazakhmys falling 4.8%.
Oil producers followed suit, with shares of Total down 1.3%. Oil giant BP fell a further 1.6%, bringing its year-to-date losses to 20.3% as it continues to battle to clean up an oil spill in the Gulf of Mexico and prepares an attempt to bring the disastrous undersea leak under control.
Also on the move, shares of Marks & Spencer fell 2.1%. The department-store retailer's net profit rose to GBP526.3m in the 53 weeks to April 3. It posted a GBP508.0m net profit in the year-ago period, which covered 52 weeks. Sales rose to GBP9.5bn, up from the prior year's GBP9.1bn. However, Marks & Spencer's management gave a cautious outlook.
On the FTSE 100, Rio Tinto slipped 103.50 pence (3.5%) to 2,843.89 pence and BHP Billiton weakened 50.00 pence (2.76%) to 1,757.51 pence.
Asian markets were sharply lower with South Korean shares taking a beating on rising geopolitical tensions, while exporters and financials were hammered around the region on renewed worries over Europe's debt problems.
Japan's Nikkei Stock Average dropped 3.1% to 9,459.89, its lowest finish since Nov. 30, while Hong Kong's Hang Seng Index fell 3.5% for its weakest close since July. China's Shanghai Composite lost 1.9%.
New Zealand shares ended lower with foreign selling pushing the market down to a fresh 10-month low as bearish sentiment from offshore markets fed through to local stocks. The NZX-50 Index dropped 1.9%, or 57.40 points, to 3,003.83, its lowest level since late July.
Base metals on the London Stock Exchange pared losses but still ended lower, sunk by solvency concerns at Spanish banks and tensions between South and North Korea. Aluminium fell $75 (3.59%) to $2,015 while copper weakened $175 (2.52%) to $6,765 and nickel dropped $1,030 (4.63%) to $21,200. Zinc shed $50 (2.60%) to $1,870 and lead lost $95 (5.15%) to $1,750. Comex copper was last quoted at 308.40 US cents per pound.
Gold futures managed a modest gain as most commodities tumbled, with the metal continuing to benefit from its role as a safe haven due to worries about credit issues in Europe and tensions on the Korean peninsula. Spot gold was last quoted at $1,201.70. Comex gold futures firmed $4.00 (0.34%) to $1,198.00. Spot silver was last quoted at $17.86.
West Texas Intermediate was last quoted at US$67.25 per barrel.
At 07:45 a.m. (AET) the US dollar was quoted at 0.8084 euros, 90.37 yen, 1.207 AUD and 69.27 pence.