A late-session buying spurt gave stocks a moderate lift Tuesday as investors managed to overcome their disappointment over troubling readings on consumer confidence and manufacturing. But with volume extremely light, analysts said it was difficult to place any real significance on the upturn.
The plunge in the Conference Board's consumer confidence index, which fell to 98.2 in August from 105.7 in July, kept stocks lower for much of the day and raised concerns on Wall Street that a lack of new jobs could extend the summer's economic slowdown through the third quarter, or perhaps longer. Data on Midwest manufacturing activity also showed a sharp decline for the month.
With oil prices extending their losses, buyers did move back into the market at the end of the session. Still, the turnaround was likely exaggerated because of the light turnover; many investors have stayed out of the market entirely during the Republican National Convention.
"It's hard to make anything out of this rise with the light trading we're in right now," said Brian Pears, head equity trader at Victory Capital Management. "No matter how you look at it, the economic numbers weren't good. We're really going to need to see evidence that this summer was a soft spot and not something prolonged."
The Dow Jones industrial average rose 51.40, or 0.5 percent, to 10,173.92. The Standard & Poor's 500-stock index gained 5.09, or 0.5 percent, to 1104.24. The Nasdaq composite index rose 1.61, or 0.1 percent, to 1838.10.
The major benchmarks ended August with the Dow rising 0.2 percent and the S&P edging 0.1 percent higher, while the Nasdaq tumbled 2.8 percent for the month.
Technology shares saw pressure from a number of reduced forecasts in microprocessors. Intel's third-quarter earnings forecast was downgraded by Morgan Stanley, while J.P. Morgan Securities lowered its outlooks for communications chip makers Xilinx and Altera. Intel fell 31 cents, to $21.29; Xilinx dropped 7 cents, to $27.43; and Altera declined 16 cents, to $18.92.
Merck edged 4 cents higher, to $44.97, despite a study it commissioned, designed to drive sales of its cholesterol drug Zocor, that showed no discernible difference between taking Zocor and simply adhering to a low-cholesterol diet.
Charles Schwab announced it would sell its Soundview Capital Markets division, purchased less than a year ago for $321 million, to Swiss investment bank UBS for just $265 million, part of Schwab's refocusing on its core businesses. Schwab fell 2 cents, to $9.45.
Grocery store chain Albertsons dropped 52 cents, to $24.58, after the company's second-quarter earnings fell year-over-year. The company blamed continuing fallout from the California grocery workers' strike in the spring, as well as higher health and welfare payments.
* The New York Stock Exchange composite index rose 39.68, to 6454.22; the American Stock Exchange index rose 8.08, to 1232.41; and the Russell 2000 index of smaller-company stocks rose 3.37, to 547.93.
* Advancing issues outnumbered declining ones by 7 to 3 on the NYSE, where trading volume rose to 1.13 billion shares, from 847 million on Monday. On the Nasdaq Stock Market, advancers outnumbered decliners by 3 to 2 and volume totaled 1.27 billion, up from 995 million.
* The price of the Treasury's 10-year note rose $5.31 per $1,000 invested, and its yield fell to 4.12 percent, from 4.18 percent on Monday.
* The dollar fell against the Japanese yen and the euro. In late New York trading, a dollar bought 109.25 yen, down from 109.93 late Monday, and a euro bought $1.2174, up from $1.2058.
* Light, sweet crude oil for October delivery settled at $42.12, down 16 cents, on the New York Mercantile Exchange.
* Gold for current delivery rose to $410.40 a troy ounce, from $407.80 on Monday, on the New York Mercantile Exchange's Commodity Exchange.