FOX Business: The Power to Prosper
The blue chips closed out the session with modest losses as traders mulled a rally in the energy markets and mixed economic data.
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The Dow Jones Industrial Average lost 25.1 points, or 0.2%, to 12,356, the S&P 500 was down 1.1 points, or 0.08%, to 1,316 and the Nasdaq Composite fell 12.7 points, or 0.46%, to 2,746. The FOX 50 edged lower by 1.9 points to 921.
Materials and energy stocks like Occidental Petroleum (NYSE:OXY) and Silver Wheaton (NYSE:SLW) performed the best as energy futures jumped. Higher energy prices, however, pressured transportation issues such as Delta Air Lines (NYSE:DAL).
"Uncertainty is really ruling the New York Stock Exchange," Doreen Mogavero, chief executive officer of Mogavero, Lee & Co. and NYSE floor trader, told FOX Business.
Energy markets got a boost after Goldman Sachs and Morgan Stanley raised their forecasts for Brent crude prices. Brent crude is the type of oil that is generally sourced in Europe.
"While near-term downside risk remains as the oil market negotiates the slowdown in the pace ofworld economic growth," analysts at Goldman wrote, "we believe that the market will continue to tighten to critical levels by 2012, pushing oil prices substantially higher to restrain demand."
Goldman estimates Brent prices, which are currently at $112 a barrel, will hit $120 in the next six months and $130 over the next year.
Similarly, Morgan Stanley notes "high prices will temper demand," but without an increase in production from the Organization of Petroleum Exporting Countries, lack of supply due to the tumult in Libya will push prices considerably higher.
A weak dollar, which was off 0.36% against a basket of world currencies, also helped buoy energy commodities. The euro gained 0.51% against the greenback.
Light, sweet crude jumped $1.89, or 1.9%, to $99.59 a barrel. Wholesale RBOB gasoline was up 5 cents, or 1.9%, to $2.99 a gallon.
On the consumer level, gasoline prices have been moderating, but remain elevated. A gallon of regular gas costs $3.83 on average nationwide, down from $3.94 last week, but up from $2.79 last year, according to the AAA Fuel Gauge Report.
Gold was up $7.90, or 0.52%, to $1,523 a troy ounce. Silver climbed $1.22, or 3.5%, to $36.12 a troy ounce.
On the economic front, new home sales unexpectedly jumped 7.3% to an annualized rate of 323,000 in April -- the best reading since December, according to the Commerce Department. Wall Street was expecting the number to remain unchanged at 300,000 for the month. Median home values were up 1.6% to $217,900.
The housing market has been struggling to recover from the economic downturn, partly because of a highly-elevated supply of homes, coupled with still tight mortgage conditions.
Manufacturing in the central Atlantic region unexpectedly slowed in May, with the Richmond Federal Reserve's gauge of manufacturing activity dipping to -6 from 10 in the prior month. The Richmond survey comes after weaker-than-expected readings in the Empire State and Philadelphia Fed surveys.
The situation in Greece -- which is struggling with an enormous public debt load -- continues to be particularly worrisome, traders say, because of the wide-ranging impact a potential restructuring of Greek bonds could cause.
Officials have repeatedly denied any type of restructuring, including one where maturity dates are pushed back but bondholders don't take a haircut, is on the table. Instead, Greece hopes to raise funds by privatizing entities that are wholly or partially owned by the government, such as OTE, a telecommunications firm and Greek Postbank.
"Nothing will be pretty about what comes next for Greece," wrote Peter Boockvar, managing director at Miller Tabak + Co., in a research note.
Medtronic (NYSE:MDT) earned $776 million, or 72 cents a share, in its fiscal fourth-quarter, compared with a profit of $954 million, or 86 cents a share, a year earlier. Excluding one-time items, it earned 90 cents, falling short of estimates of 92 cents.
Nestle (NASDAQ:NESN) unveiled plans to acquire Prometheus Laboratories for an undisclosed sum in a bid to bolster its "science-based nutritional" offerings, the companies said in a release.
El Paso (NYSE:EP) plans on splitting into two publicly traded businesses. One company will contain the pipeline and midstream entities and the other will focus on production and exploration in the natural gas market.
Chrysler fully repaid roughly $7.6 billion in bailout loans from the U.S. and Canadian governments.
The English FTSE 100 was up 0.39% to 5,858, the French CAC 40 was higher by 0.25% to 3,917 and the German DAX gained 0.41% to 7,151.
In Asia, the Japanese Nikkei 225 was up 0.17% to 9,477 and the Chinese Hang Seng inched higher by 0.09% to 22,731.