by Marc Bastow | July 31, 2012 4:59 pm
Despite a spate of good economic and political news, investors continued to twiddle their thumbs Tuesday, once again waiting for central bank meetings both in the U.S. and Europe to find out whether the U.S. Federal Reserve and the European Central Bank will announce new stimulus measures to boost their respective economies.
Markets were essentially flat until falling late in the day despite an encouraging economic report in the housing sector, where home prices in 20 major cities rose 2.2% in May. Additionally, the Chicago PMI reading on manufacturing activity rose to 53.7 in July from 52.9 the prior month, ahead of a 52.5 reading expected for the month.
Later in the day, Congressional leaders announced a short-term spending deal that will fund the government for six months when the fiscal year expires Sept. 30. The agreement puts the “fiscal cliff” issue on hold, at least for the time being.
The Dow dropped 0.49% to finish at 13,008, while the S&P fell 0.43% to end at 1,379. The Nasdaq managed to claw back some of its early losses, closing down 0.21% at 2,939.
In earnings news, Coach (NYSE:COH) shares fell off a cliff after the retailer reported disappointing revenues, mostly thanks to sluggishness in North America, with that market growing at an anemic 1.7% rate. Shares traded down more than 18% on the news, and a ripple effect hit luxury retailers like Tiffany (NYSE:TIF) and Ralph Lauren (NYSE:RL), which lost a respective 4% and 2%.
Pfizer (NYSE:PFE) moved ahead 1.6% on the day after revenues and earnings topped Wall Street estimates, despite pressure on revenues from a stronger dollar and the expiration of their patented Lipitor cholesterol drug.
Real America Index member Cummins (NYSE:CMI) soared 6% on the day as adjusted profits beat Street expectations, gross margins came in at a record high and the company forecast stronger margins for the rest of 2012. The news also helped lift Navistar (NYSE:NAV) 2%.
U.S. Steel (NYSE:X) managed to make a 50% drop in earnings look good. Adjusted EPS still managed to beat Street expectations, and U.S. Steel told investors it expects to make a profit for the coming quarter, helping X shares soar 10% on the day. The news also lifted sectormate AK Steel (NYSE:AKS) by 3%.
Well more than 100 earnings reports are scheduled for Wednesday, including announcements from Boston Beer (NYSE:SAM), Devon Energy (NYSE:DEV), Green Mountain Coffee (NASDAQ:GMCR), Harley-Davidson (NYSE:HOG) and Tesla Motors (NASDAQ:TSLA).
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities.
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