BLBG: U.S. Stocks Fluctuate as Commodities Slump Offsets Housing Data
U.S. stocks fluctuated as a selloff in commodities that weighed on raw-materials producers offset data showing improvement in the housing industry.
Freeport McMoRan Inc. dropped 3.3 percent as copper prices tumbled. Wal-Mart Stores Inc. fell 2.7 percent after cutting its annual earnings forecast, while Home Depot Inc. added 3.1 percent after boosting its outlook. KB Home and PulteGroup Inc. added more than 3.2 percent as homebuilders extended yesterday’s rally.
The Standard & Poor’s 500 Index fell less than 0.1 percent to 2,102.08 at 10:22 a.m. in New York. The Dow Jones Industrial Average added 11.03 points, or 0.1 percent, to 17,556.21.
“We’re seeing China dominating headlines and concern the consumer is not all in right now,” said Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates Inc. in Bethlehem, Pennsylvania. “Until this economic environment and earnings stabilize, we’re going to continue to see the back-and-forth in stocks.”
Oil and copper led a slide in commodities on speculation the global fuel glut will persist and China’s economy will face further headwinds. The declines come a week after China’s first major currency devaluation since 1994 surprised global investors and fueled concern authorities are struggling to combat a slowdown in the world’s second-largest economy.
Interest Rates
Concern over the impact on global growth comes as the Federal Reserve is signaling it will raise interest rates this year. The central bank releases minutes from its July meeting on Wednesday, with market expectations of a September rate hike falling to about 44 percent from about 50 percent last week.
The S&P 500 rose 0.5 percent on Monday as data showing strong confidence among U.S. homebuilders helped reverse earlier losses spurred by weak manufacturing in the New York region.
Futures pared losses today after data showed new-home construction in the U.S. climbed in July to the highest level in almost eight years. A drop in permits, a proxy for future construction, signals additional gains will take time to develop.
