Stocks close mixed as Nasdaq ekes out gain
Hewlett-Packard's lowered forecast pulled the Dow down, to close about 68 points lower than the previous session. The Nasdaq barely gained, rising 0.90 points just before closing.
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The Dow Jones Industrial Average fell 68.79 points, or 0.55 percent, to close at 12,479.58, after dropping more than 170 points early in the session. It was the third straight day of losses for the blue-chip average, and the lowest close since April 20.
Hewlett-Packard led the Dow lower after news the tech giant said it would cut its forecast for the third quarter and the year—despite good first quarter results—citing the effects of the Japanese disasters, weak personal computer sales and reducing operating profit for services. In addition, at least four brokerages downgraded their ratings on the company.
Meanwhile, Home Depot was among Dow gainers after the home-improvement retailer beat profit estimates by one penny as investors shrugged off a drop in sales compared with last year. Home Depot blamed bad weather for the sales slump.
The S&P 500 fell 0.49 points, or 0.04 percent, to close at 1,328.98, the lowest close since April 19 and the third straight down day. The tech-heavy Nasdaq rose 0.90 points, or 0.03 percent, to close at 2,783.21, edging into positive territory just before the market closed. Stocks have already had as many down days in May as in April. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose above 18.
Among key S&P 500 sectors, industrials and materials fell, while defensive sectors such as utilities gained.
Although it feels a lot worse, the S&P 500 is only down 3.5 percent from its peak in late April, said Oliver Pursche, president of Gary Goldberg Financial Services
"There’s a lot more anxiety and a feeling that things are worse than they actually are," Pursche said.
Also, Pursche noted, the declines have been on declining volume. "From a purely technical perpspective, that’s not overly concerning," he said.
Nonetheless, there are troubling signs that warrant investor concern. Recent economic reports have pointed to troubles in the economy, Pursche said. Also, Dominque Strauss-Kahn's arrest on sexual assault charges present an "unwanted distraction" that is "certainly not going to speed along the debt troubles in Europe," he said.
"There is certainly some anxiety over what happens next," Pursche said.