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Archive for July, 2010

Look for my story on Watson Furniture Group

Friday, July 30th, 2010

Toured the greatly enlarged Watson Furniture Group plant at Twelve Trees today. Talked with President Clif, as well. Look for my story on what’s new with Watson on Monday. It’s all about the ability to use down time in the recession to position for the future.

Rachel Pritchett


Friday stocks glacial, but July showed forward movement

Friday, July 30th, 2010

Dow closed at 10,465, unchanged.

NEW YORK (AP) — Stocks had a fitting end to a choppy July as prices seesawed their way to a narrowly mixed finish. But despite the turbulence, this was still the market’s best month in a year.
Investors had an ambivalent response to the government’s gross domestic product report, which showed that economic growth slowed in the April-June quarter. The Dow Jones industrial average fell almost 120 points in early trading, then ratcheted up and down until the close. The Dow ended down just a point, and the other big indexes had similarly small moves.
The day was much like the rest of July, which saw investors alternately buying on strong earnings reports and selling on weak economic numbers. The Dow rose 7.1 percent for the month, its best showing since it rose 7.8 percent in July 2009.
But a repeat performance in August seemed unlikely amid investors’ pessimism at the end of the month, especially since the bulk of companies’ second-quarter earnings reports are in.
“It’s a very cautious environment today,” said Rob Lutts, president, CIO at Cabot Money Management. That caution, he said, is what leads investors to sell.
The Commerce Department’s GDP report was troubling for the market. GDP grew at an annual pace of 2.4 percent in the second quarter, less than the 2.5 percent forecast of economists polled by Thomson Reuters.
The report confirmed investors’ belief that the recovery is weakening as unemployment remains high and government stimulus programs end. Consumers cut back on their spending because of job worries and companies spent less to rebuild inventories.
But analysts said that as investors read deeper into the report, it didn’t look as bad as they initially thought. They found some good news in consumers’ savings rate.
And business spending on equipment and software jumped in the second quarter by the biggest amount in 13 years. That was encouraging, analysts said, because it means companies are eventually going to start adding jobs.
Overall, “we had a little bit for the bulls and a little bit for the bears and ultimately no one is really happy,” Lutts said.
The Dow fell 1.22, or 0.01 percent, to 10,465.94. The Standard & Poor’s 500 index rose 0.07, or 0.01 percent, to 1,101.60, while the Nasdaq composite index rose 3.01, or 0.1 percent, to 2,254.70.
Rising stocks outpaced losers by about 3 to 2 on the New York Stock Exchange where volume came to 1.1 billion shares.
Volume was extremely light even for a summer day. That continued a trend seen for much of July. Analysts say many investors, uncertain about the where the market is heading, stayed on the sidelines or moved money into safer alternatives.
That strategy sent Treasurys higher Friday. The yield on the 10-year Treasury note, which moves opposite its prices, fell to 2.91 percent from 2.99 percent. Its yield is often used as a benchmark for interest rates on mortgages and other consumer loans. A yield below 3 percent suggests investors are worried about long-term growth and don’t fear inflation will be a problem anytime soon. Inflation is a threat to the long-term value of bonds.


Convention center in Suquamish?

Thursday, July 29th, 2010

This is a guest blog post from reporter Derek Sheppard.

How would you like to see a convention center in Poulsbo?

Though it’s an idea that came up before, you won’t be attending any Leif Ericson lookalike conventions in Little Norway. Down the road, however, there may be convention space in the coming years. And maybe not.

This is the upshot from Wednesday night’s Economic Development Committee meeting at Poulsbo City Hall. Some in the Greater Pouslbo Chamber of Commerce had been inquiring about a potential convention space, and contacted Port Madison Enterprises in nearby Suquamish.

Port Madison Enterprises CEO Russell Steele was asked to update the city on plans for a convention center near the casino. His response was thoughtful, but measured, as is usually the case.

“I’d say long term that something we’re seriously considering,” he said. But considering and doing are very different. Serious pursuit of the idea is probably still a couple of years out, he said.

It was an opportunity to shed some light on how PME, the Suquamish Tribe’s business arm and one of the county’s largest private employers operates. Change, growth and development seem constant with PME in recent years, but it’s not willy nilly. Each year the PME board of directors drafts a plan, then seeks approval from the Tribal Council, which is akin to a city council. Rachel wrote about the current plan a while back.

Like any business, sometimes things come up that aren’t on the plan. For those of you following along, that would be PME’s purchase of the White Horse golf course in February.

White Horse is one of the main reasons PME isn’t looking at building convention space now. The focus there is to get a clubhouse built and making the course easier to play for average duffers. Or, as Steele joked, making the course “full of opportunities.”

The Clearwater Casino used to have a large convention space, but when PME bought Kiana Lodge it filled the space with 400 more slots and moved the convention biz down the road to Kiana. A convention space would allow the casino to host large gatherings and trade shows, and provide a larger indoor space for music performances.

A couple of years ago, Steele said, PME studied having a large space, but would need to revisit any studies because of the changing economic realities.

Poulsbo Mayor Becky Erickson wondered if the decline in convention business was solely related to the recession, or a larger trend because of the ease of Internet-based communication and collaboration.

“That’s why we have to revisit the analysis on that,” Steele said.

But Steele was quick to point out that talk about a convention space is just that right now. Talk.


Thursday stocks fall as traders await Friday’s GDP report

Thursday, July 29th, 2010

Dow now at 10,430, down 67 points so far.

NEW YORK (AP) — Stocks fell Thursday as investors took a dim view of the latest report on unemployment and warily waited for the government’s reading on second-quarter gross domestic product.
Stocks initially rose on some upbeat earnings reports, but momentum quickly faded. The Dow Jones industrial average fell nearly 74 points in midday trading and other major stock indexes also fell.
Southwest Airlines Co., ExxonMobil Corp., Avon Products Inc. and Sony Corp. all topped earnings forecasts, but investors were more focused on economic numbers. The Labor Department said initial claims for unemployment benefits dropped by a modest 11,000 to 457,000 last week. That’s slightly better than the 459,000 forecast by economists polled by Thomson Reuters, but not good enough to keep traders buying.
“They saw it was more of the same,” said Bryan Jordan, director of financial markets analysis at Nationwide Investments. “This is an unusually stagnant labor market.”
Daniel Penrod, senior industry analyst at the California Credit Union League, said investors are concerned because there hasn’t been a consistent decline in the number of claims for unemployment benefits.
“The stops and starts are likely to cause more hesitation” in the stock market, Penrod said.
Stock trading has been bumpy the past few months as investors tried to reconcile conflicting views of the economy. Government and private reports have pointed to a slowdown in growth while companies has issued optimistic outlooks. So, while the latest earnings reports looked good, investors are also well aware that the Federal Reserve said Wednesday that the recovery is weakening in some parts of the country.
“A bull market needs a continuing feeding of good news,” said Alan Gayle, senior investment strategist at RidgeWorth Investments. Economic reports have been “soft” this week, he said.
Ttraders were uneasy while they waited for the GDP, the broadest measure of the economy. Economists are forecasting that the GDP slowed in the second quarter to an annual rate of 2.5 percent as the government cut back on economic stimulus programs. That would be down from the first quarter’s 2.7 percent.
In midday trading, the Dow fell 73.64, or 0.7 percent, to 10,424.32. The Standard & Poor’s 500 index fell 9.64, or 0.9 percent, to 1,096.49, while the Nasdaq composite index fell 27.89, or 1.2 percent, to 2,236.67.
Declining stocks outpaced advancers by 2 to 1 on the New York Stock Exchange, where volume came to 418.5 million shares.
Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.98 percent from 2.99 percent late Wednesday.
Southwest reported income that beat analyst forecasts. The company reported heavy traffic to start the summer travel season. ExxonMobil’s earnings rose as a result of higher oil prices. Beauty products seller cited sales in Europe and Latin America for its higher income.
Japanese electronics maker Sony also reported strong earnings because of a jump in sales of televisions and PlayStation 3 gaming consoles.
Southwest shares fell 8 cents to $11.93 after climbing earlier in the day. ExxonMobil dipped 31 cents to $60.60, also erasing earlier gains. Avon Products rose 62 cents, or 2.1 percent, to $30.15. Sony shares trading in the U.S. jumped $2.22, or 7.5 percent, to $31.78.
Colgate-Palmolive’s earnings beat forecasts, but revenue fell short of expectations. It also said it would take a bigger charge than previously expected because of Venezuela’s devaluation of its currency. When currencies in other countries fall, overseas profits for U.S. companies also come in lower when they’re translated into dollars.
The consumer products maker’s stock fell $7.07, or 8.4 percent, to $76.79.
Strong earnings and outlooks helped stocks overseas. European indexes mostly rose following strong earnings from pharmaceuticals company AstraZeneca PLC, drug and materials company Bayer AG and telecommunications companies BT PLC and France Telecom SA.
Moody’s Investors Service said ratings on banks in Europe would not be affected following tests by regulators on the continent to determine whether banks would survive a further economic slowdown. Only seven of 91 banks failed the test, which reassured investors that the financial industry in Europe is stronger than previously thought.
The euro rose to $1.3064, and earlier in the day touched its highest level since early May.
Britain’s FTSE 100 fell 0.1 percent, Germany’s DAX index fell 0.7 percent, and France’s CAC-40 dropped 0.5 percent. Japan’s Nikkei stock average fell 0.6 percent.


Wednesday Down Ends Four-Day Streak

Wednesday, July 28th, 2010

Dow closes the day at 10,497, down 46 points.

NEW YORK (AP) — Investors cashed in some of their recent gains Wednesday after the Federal Reserve gave them more confirmation that the economic recovery is slowing.
The Dow Jones industrial average fell almost 40 points after the Fed released its regional survey of the economy, a report known as the “beige book.” The Fed said economic growth has been steady during the summer in Cleveland and Kansas City, but has slowed in Atlanta and Chicago. The central bank described economic activity elsewhere as modest.
The report had some sobering news about manufacturing, which had been one of the strongest parts of the economy. While manufacturing expanded in most of the Fed’s 12 regions, about half — New York, Cleveland, Kansas City, Chicago, Atlanta and Richmond — said manufacturing had “slowed” or “leveled off.”
Investors weren’t surprised by the Fed report, but they also didn’t like hearing their own downbeat assessment of the economy confirmed by the central bank.
“It does reiterate that the economy is not bouncing back as much as we would hope,” Ryan Detrick, senior technical strategist chairman of Schaeffer’s Investment Research, said of the beige book.
But Detrick also said the report gave investors an excuse to cash in some of their gains from the market’s rally late last week and early this week. The Dow rose almost 420 points in four days as investors bought stocks in response to companies’ strong second-quarter earnings and upbeat forecasts for the rest of the year.
The Fed survey followed a disappointing Commerce Department durable goods orders report early in the day. Orders for durable goods, which are expected to last at least three years, fell 1 percent in June. Economists expected a 1 percent gain.
Investors have been trying in recent weeks to balance strong earnings and corporate outlooks with economic data that isn’t as encouraging. A drop in consumer confidence Tuesday helped push stocks mostly lower although another batch of robust earnings reports came out.
“The biggest issue the market is looking at is whether the soft patch in economic data is likely to continue,” said Michael Sheldon, chief market strategist RDM Financial Group. “Investors wonder if the strong earnings reports that we have seen are more backwards as opposed to forwards looking.”
The Dow fell 39.81, or 0.4 percent, to 10,497.88. The Standard & Poor’s 500 index fell 7.71, or 0.7 percent, to 1,106.13, while the Nasdaq composite index fell 23.69, or 1 percent, to 2,264.56.
Two stocks fell for every one that rose on the New York Stock Exchange, where consolidated volume came to 4.1 billion shares versus 4.7 billion shares Tuesday.
Volume has been light even by summer standards, which has added to the day-to-day volatility. Many investors have been staying out of the market while they try to get a clearer sense of how the economy is faring.
Treasury prices, which get a boost from bad economic news, rose after the beige book was released. That sent interest rates lower. The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.99 percent from 3.05 percent compared with late Tuesday. That yield helps set interest rates on mortgages and other consumer loans.
David Hefty, CEO of Cornerstone Wealth Management, said many investors are waiting for the government’s report on gross domestic product, the broadest measure of how the economy is doing, before making any big investing moves.
The report will be issued before trading opens on Friday. Economists surveyed by Thomson Reuters are forecasting that the GDP rose at an annual rate 2.3 percent from April-June. That would be down from the first quarter’s 2.7 percent.
Earnings reports were mixed Wednesday. Boeing Co. said its profit slipped from a year ago, but results still topped expectations. The airplane maker also didn’t adjust its outlook.
Sprint Nextel Corp. said it added subscribers to its network for the first time in three years during the second quarter as it improves customer service and retention. Its revenue slightly topped forecasts.
ConocoPhillips profit more than doubled as refining margins improved and oil prices rose.
Sprint Nextel rose 1 cent to $4.84. ConocoPhillips was unchanged at $54.44. Boeing fell $1.30 to $67.32.
Overseas, Britain’s FTSE 100 fell 0.9 percent, Germany’s DAX index dropped 0.5 percent, and France’s CAC-40 rose 0.1 percent. Japan’s Nikkei stock average jumped 2.7 percent.


Recession Will Plod on Longer Than Thought

Wednesday, July 28th, 2010

WASHINGTON (AP) — The U.S. economic recovery will remain slow deep into next year, held back by shoppers reluctant to spend and employers hesitant to hire, according to an Associated Press survey of leading economists.
The latest quarterly AP Economy Survey shows economists have turned gloomier in the past three months. They foresee weaker growth and higher unemployment than they did before. As a result, the economists think the Federal Reserve will keep interest rates near zero until at least next spring.
Yet despite their expectation of slower growth, a majority of the 42 economists surveyed believe the recovery remains on track, raising hopes that the economy can avoid falling back into a “double-dip” recession.
The AP survey compiles forecasts of leading private, corporate and academic economists on a range of indicators, including employment, consumer spending and inflation. Among their forecasts:
— Economic growth the rest of this year and early next year will weaken, to less than 3 percent. From January through May, the economy grew at roughly a 3.5 percent pace.
— The unemployment rate will be no lower at the end of the year than it is now — 9.5 percent. A majority think it will be 2015 or later before the rate falls to a historically normal 5 percent.
— State budget shortfalls pose a “significant” or “severe” risk to the national economy. The loss of tax revenue has forced state and local governments to cut services and lay off workers.
The weak economy leaves Democrats and Republicans on Capitol Hill vulnerable as they head into the November midterm elections. Democrats, who now control both chambers, have the most to lose. The gloomier outlook is also a liability for President Barack Obama.
The economists have turned more pessimistic since the recovery hit turbulence in May. Europe’s debt crisis sent tremors through Wall Street, causing stocks to tumble and raising doubts about the durability of the rebound.
Since then, businesses have been slow to step up hiring. Americans’ confidence in the economy has declined, leading shoppers to reduce spending. And the housing market has weakened further with the end of a homebuyer tax credit that had buoyed sales earlier this year.
Consumers aren’t leading this rebound, as they usually do, despite ultra-low borrowing costs. Their spending growth will weaken in the second half of this year and strengthen only slightly next year, a majority of economists said. They think shoppers’ reluctance to spend more money poses a “significant” or “severe” risk to the recovery.
“It seems like we hit an air pocket in consumer spending,” said survey participant Richard DeKaser, president of Woodley Park Research.
Kasey Doshier, a graphic designer in Chicago, said the recession taught her to rein in her spending. The key moment came early last year, when her employer cut her pay 15 percent to avoid layoffs.
“I just lived paycheck to paycheck and had a good time,” said Doshier, 32. “It’s kind of scary to think that I am a paycheck away from being homeless.”
Doshier’s pay has been reinstated, but she’s still watching her money. Dinner and drinks with friends are gone. Now she goes to free street festivals and the city pool. She explores Chicago neighborhoods by taking her dog on long “adventure walks.”
The tight job market, scant pay raises and drooping home values are forcing others, too, to spend less and save more. Americans saved 4.2 percent of their disposable income last year. That was the highest level since 1998. Economists expect roughly the same level of saving this year and next.
That’s why growth of less than 3 percent is forecast into 2011. And weak growth helps explain why unemployment is likely to stay high. It takes about 3 percent growth just to create enough jobs to keep pace with the population increase.
Growth would have to equal 5 percent for a full year to drive the unemployment rate down by 1 percentage point. Neither the economists in the AP survey nor the Obama administration expects that to happen.
The Fed’s outlook has turned bleaker, too. It’s why Chairman Ben Bernanke and his colleagues are weighing new steps to invigorate the economy if the recovery shows signs of backsliding. They are also expected to hold interest rates at record lows longer than economists thought three months ago.
A survey the Fed released Wednesday showed the economy facing a bumpy path back to health. The pace of economic activity remained modest in most of the country.
Most economists surveyed said the Fed would being raising short-term rates no sooner than next spring. In the last survey, most had thought it could happen as soon as late this year.
At the same time, state budget shortfalls have emerged as a major threat in the economists’ view. State and local governments cut their spending in the first three months of this year at a 3.8 percent pace. That was the biggest cutback since the second quarter of 1981, just before the economy entered a severe recession.
When states and localities tighten spending by trimming services and jobs, the cutbacks ripple through the broader economy, causing individuals to spend less, too. The drop in state and local government spending shaved about half a percentage point off the U.S. gross domestic product in the first three months of this year.
Nearly two-thirds of the economists view the states’ budget crises as a significant or severe threat to the rebound.
Despite such risks, 55 percent of the economists described the recovery as “on track” as of the middle of the year. The rest said it was “faltering.”
“There’s a risk that the loss of momentum will snowball and feed on itself, but I think in the end the recovery will stay on track,” predicted another survey participant, James O’Sullivan, global chief economist at MF Global.


Earl Industries Lease Agreement Approved

Wednesday, July 28th, 2010

BREMERTON
Earl Industries LLC, the Portsmouth, Va.-based Navy ship repair company, will move into the Port of Bremerton’s industrial park.
Port commissioners Tuesday approved a $3,960-a-month lease, which buys the use of a 7,200-square-foot building for Earl Industries.
The company is expecting to win a contract from the Navy to perform repair and maintenance work on the big flattop USS Nimitz, due in to Puget Sound Naval Shipyard in December. The $250 million in repairs is expected to occur over 16 months.
Port Chief Executive Officer Cary Bozeman congratulated port real-estate director Tim Thompson for getting the new tenant, saying there were other competitors for the business.
In other action, commissioners gave final approval on the now-completed refurbishing of the 6,000-foot-long runway at Bremerton National Airport. The $3.2 million project that included repaving the runway and improving drainage was paid for almost entirely by the Federal Aviation Administration.


Bremerton gas on the way up

Tuesday, July 27th, 2010

Auto club AAA pegs a gallon of unleaded going for $3.04 today, up from $2.97 a week ago and from $2.92 a month ago.

Rachel Pritchett


Are you a “return-a-holic”?

Tuesday, July 27th, 2010

Bloggers,

I personally can’t imagine doing what’s described in this story as a common practice. How about you? Rachel Pritchett, business reporter

St. Petersburg Times via Scripps Howard
Derek Rodner calls them “returnaholics,” a breed of shoppers costing the retail industry an estimated $10 billion to $15 billion a year, according to the National Retail Federation.
They might buy a big-screen TV for the Super Bowl, a computer to write a term paper or a dress for a special occasion, with no intent to keep the item.
Return abuse has always been an issue, but the economy seems to have intensified the problem, said Rodner, vice president of product strategy at Agilence Inc., a retail loss-prevention technology company.
“A lot of people who are otherwise honest are scrambling just to feed their children but the reason for the return is not always that honorable,” Rodner said.
In 2009, U.S. retailers reported losing an estimated $9.6 billion due to return fraud and abuse, down from $11.8 billion in 2008, according to the federation.
Joseph LaRocca, the group’s senior asset protection adviser, attributes the decline in dollar losses to retailers reviewing their return policies to better identify shoppers who abuse them or are engaged in criminal behavior. Stores also are more clearly explaining return policies, printing guidelines on receipts or at the registers, he said.
Retailers expect a certain level of returns, but when fraud occurs, it can seriously harm the retailer and affect consumers who have to pay higher prices to offset costs, LaRocca said.
There are several types of return abuse. The bleak job market has some struggling to make a few bucks, so they might buy items on sale and then try to return them for a refund at regular prices.
Returnaholics are often guilty of “wardrobing,” buying and returning merchandise after a single use. This often applies to clothes but can apply to other items, such as tools returned after a job is complete.
“They’re definitely skirting the ethics boundary,” Rodner said.
Rodner calls another category of returnaholics “pointers,” consumers who buy products just to get points offered by reward credit cards. Typically, cardholders won’t lose the points if they’ve already been applied to the account when the item is returned, Rodner said.
Retailers lose more than profits when an item is returned. They pay the credit card company a transaction fee at the time of purchase and at the time of return. There are additional costs of repackaging and restocking the merchandise. If it cannot be resold, the sale is written off as a total loss.
These types of shoppers are definitely gaining from the system, but it’s hazy as to whether they are actually committing a crime, Rodner said. In contrast, there’s no question laws are broken when someone plucks something off the shelf without paying and attempts to return it.
Retailers often tout their hassle-free return policies, encouraging customers to shop with confidence. Reluctant consumers might spend fewer dollars when stores tighten their return policies and shorten the return window.
In the past, few retailers required a consumer to show a receipt for a return. Consumers are losing that freedom, Rodner said.
As of May 2009, Target changed its return policy to “increase flexibility” for guests, said Sonja Pothen, a company spokeswoman. Before then, customers without receipts could return two items that cost up to $35. Target shoppers now can return an unlimited number of items that cost up to $70 in one year without receipts, she said.
The Home Depot customer can return any item with a receipt within 90 days for a full refund. After 90 days, he or she can bring it back without a receipt and get store credit, said Kathryn Gallagher, a company spokeswoman.
The home improvement retailer is also known for its lenient return policy on plants. If a plant dies within a year, a customer can bring in a receipt or the pot it was planted in and the store will replace it, Gallagher said.
Return abuse is a concern, Gallagher said, but there are systems in place that track how many times a customer makes a return and the nature of the return. Most of the time, the store allows the return to maintain the customer’s loyalty, she said.
“When you start hassling someone over something small, you’re going to lose that customer,” Gallagher said.
“It doesn’t take much to tick off a consumer,” Rodner agreed.
Still, retailers need to protect themselves to stay in business, and implementing return policies is one way to do it, he said.
Many retailers have started using software to track returns. Agilence’s software highlights suspicious incidents so retailers can pinpoint returns that exceed a certain value, are processed at a particular time of day, or take place without a customer present.
The software synchronizes a video of each product being scanned along with product data. The ability to view both the receipt and corresponding video is enabling retailers to spot fraudulent activities that many times go undetected, according to Agilence. For every dollar spent on the software, retailers see a $6 return, Rodner said.


Confidence report dampens Tuesday stocks

Tuesday, July 27th, 2010

Dow now at 10,543, up 18 points.

NEW YORK (AP) — The stock market’s rally was chilled Tuesday by news that consumers are becoming more pessimistic.
Stocks fell modestly after three days of big gains. The Dow Jones industrial average fell 3 points, and broader indexes dropped slightly.
The Conference Board’s report that its Consumer Confidence Index fell to 50.4 from June’s revised reading of 54.3 distracted investors from another batch of upbeat earnings reports. The market had expected the index to come in at 51.
Consumer confidence has been falling in recent months as people have waited in vain for a turnaround in the job market. That has made many consumers hesitant to spend and in turn raised concerns about whether the economic recovery would continue.
Companies have a very different take on the economy from consumers. Chemical maker DuPont Co. on Tuesday joined the growing number of big corporations that have raised their forecasts for the future. DuPont, a component of the Dow, also easily beat analysts’ predictions for its second-quarter profit and revenue.
Still, investors have been torn over the past few months between buying on companies’ upbeat reports and selling on government and private sector numbers that keep pointing to a slowing of the economy.
“Investors are really uncertain whether to focus on the underlying economy or earnings,” said Tyler Vernon, principal and portfolio manager at Biltmore Capital Advisors.
Earnings had investors attention’ the past two weeks but the occasional economic number can sometimes trump companies’ results, Vernon said. When earnings reports are done, unsettling data on jobs, housing and consumer spending will dominate trading, and may well lead to more seling.
Traders initially shrugged off the consumer confidence report, then began selling as the day wore on.
John Brady, a senior vice president at MF Global in Chicago, said there is little that’s likely to turn around consumer confidence in the near future. Consumers won’t become more optimistic until they see a drop in unemployment and clear signs that employers are hiring.
“I don’t know what turns around confidence aside from jobs growth,” Brady said.
In midday trading, the Dow fell 3.52, or 0.03 percent, to 10,521.61.
The Dow has surged in July, rising 7.7 percent during the month. The sharp gains helped push the index back into the black for the year on Monday. In the past three trading days alone, the Dow has jumped 405 points, or 4 percent, because of consistently strong earnings and outlooks.
The Standard & Poor’s 500 index fell 3.63, or 0.3 percent, to 1,111.38, while the Nasdaq composite index fell 14.83, or 0.7 percent, to 2,281.60.
Losing stocks were ahead of gainers by 3 to 2 on the New York Stock Exchange, where volume came to 604.6 million shares.
Bond prices fell, sending their yields higher. The yield on the 10-year Treasury note rose to 3.05 percent from 2.99 percent late Monday. That yield helps set interest rates on mortgages and other consumer loans.
Stocks got a lift Monday after a report on new home sales rose more than expected last month. The housing market has remained weak, particularly since a tax credit for home buyers expired at the end of April.
The market had some other negative economic news Tuesday, a report of a slowdown in regional manufacturing from the Richmond Federal Reserve. The Richmond Fed’s manufacturing index fell to 16 this month from 23 in June.
News on the housing market was mildly upbeat. The S&P/Case-Shiller 20-city home price index for May rose 1.3 percent from April. But the homebuyer’s tax credit that expired April 30 had an impact on the reading, and the report warned that the recent gains in home prices are not likely to last.
But there was good economic news from overseas. Major European banks including UBS AG and Deutsche Bank reported strong earnings. The results came a few days after regulators evaluated banks across Europe to see which might have trouble surviving another economic downturn. Major European indexes rose following the earnings and another positive report on Germany’s economy.
DuPont’s stock rose $1.21, or 3.1 percent, to $40.20.
UBS shares trading in the U.S. rose $1.27, or 8.4 percent, to $16.42. Deutsche Bank jumped $1.59, or 2.4 percent, to $67.77.
Britain’s FTSE 100 rose 0.3 percent, Germany’s DAX index gained 0.2 percent, and France’s CAC-40 rose 0.8 percent. Japan’s Nikkei stock average earlier fell 0.1 percent.