Reuters | 09:02 PM,Aug 28,2012
By Chuck Mikolajczak
NEW YORK (Reuters) – U.S. stocks held close to the flat line in yet another lightly traded session on Tuesday as mixed data gave investors little indication of whether Federal Reserve Chairman Ben Bernanke might signal another round of stimulus later in the week.
Bernanke is speaking on Friday at a conference in Jackson Hole, Wyoming, and market participants are waiting to see whether he will announce new measures to boost economic growth. He is expected to sustain expectations for a third round of quantitative easing, though he could keep markets guessing about the timing of such an action.
Expectations for more stimulus measures have risen alongside signs of slowing growth. Japan’s government just cut its economic assessment, citing a deceleration in the U.S. and China.
U.S. consumer confidence unexpectedly weakened in August to its lowest in nine months as Americans turned more pessimistic about the short-term outlook, according to the Conference Board while the SP/Case Shiller composite index of 20 metropolitan areas showed U.S. home prices rose for the fifth consecutive month.
“A mixed bag of economic indicators that sort of point downward; we are all hopeful this leaves some room for the Fed to shower money on us,” said Jack Ablin, chief investment officer, Harris Private Bank in Chicago.
“Unfortunately a fair amount of stimulus is probably priced in so we are at a period now where bad news is good news until we hear what (Bernanke) is actually going to do.
The Dow Jones industrial average shed 10.05 points, or 0.08 percent, to 13,114.62. The Standard Poor’s 500 Index lost 1.41 points, or 0.10 percent, to 1,409.03. The Nasdaq Composite Index dipped 2.52 points, or 0.08 percent, to 3,070.67.
The SP 500 has been mired in a fairly tight range over the last three weeks, finding a support level at 1,400 while also unable to convincingly pierce the April high of 1,422.38, which has acted as a resistance point. The index has been unable to muster a move of at least 1 percent in either direction since August 3.
Lexmark International Inc surged 15.1 percent to $21.88 as the biggest percentage gainer on the SP 500 after it said it would stop making inkjet printers, cut about 1,700 jobs, and focus on its more profitable imaging and software businesses. The NYSEArca computer hardware index rose 1.4 percent.
PVH Corp raised its full-year earnings outlook for the third time this year, as it expects its European business to grow and its flagship Tommy Hilfiger brand to remain popular with shoppers. Shares climbed 5.6 percent to $93.42.
(Editing by Dave Zimmerman)
MUMBAI (Reuters) – The Reserve Bank of India (RBI) on Tuesday sought to make it easier for investors to trade shares of foreign companies listed on the domestic stock market.
It said it was allowing limited convertibility of Indian depository receipts (IDRs) into underlying equity shares, and vice versa.
The setting up of IDRs was aimed at encouraging foreign companies to tap the Indian capital markets, but there have been a number of restrictions on convertibility.
Only Standard Chartered Plc has used the instrument so far.
The RBI said there would be an overall cap of $5 billion for raising of capital by issuance of IDRs by foreign companies.
(Reporting by Shamik Paul. Editing by Jeremy Gaunt.)