Equity Markets End Day Flat, Oil Rallies

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The markets ended the trading day little changed, while crude oil prices jumped 1.7% to the highest level in more than a month.

Today's Markets

The Dow Jones Industrial Average fell 2.7 points, or 0.02%, to 12,291, the S&P 500 gained 0.1 point, or 0.01%, to 1,265 and the Nasdaq Composite rose 6.6 points, or 0.25%, to 2,625.

Trading was quite subdued on the day. In fact, the Dow traded in a 58.5-point range on Tuesday -- the lowest since July 20. The modest loss, however, snapped the blue-chip average's winning streak. The broader S&P 500 managed to eke out a very slight gain, ending in the green for the fifth-straight session.

Out of the blue chips, Intel (NASDAQ:INTC), Cisco (NASDAQ:CSCO) and AT&T (NYSE:T) were the best performers. JPMorgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC), the two biggest American banks by assets, were the laggards on the Dow. Indeed, big investment banks such as Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) struggled as well.

Shares of Sears Holdings (NASDAQ:SHLD) plunged 27.4% after the retailer said it would close between 100 and 120 Kmart and Sears stores amid sliding demand for consumer electronics and home appliances.

The utilities sector was a strong performer on the day, with companies like The Southern Company (NYSE:SO) rallying. Energy companies like Halliburton (NYSE:HAL) posted a modestly strong performance as well.

Energy futures got a boost after state media in Iran said a senior official in that country threatened to cut off crude oil shipments in the Straight of Hormuz should international sanctions be applied. The strait is a key shipping channel, and such a blockade could potentially have significant political and economic consequences, analysts have said.

The benchmark crude oil contract traded in New York jumped $1.66, or 1.7%, to $101.34 a barrel. Crude is now trading at the highest level since November 16, and is up 10.9% for the year.

Wholesale RBOB gasoline climbed 0.06% to $2.6889 a gallon.

A significant driver of the markets' strong performance over the past week has been a round of data showing the labor market, housing sector and consumer sentiment are improving, suggesting broader growth could begin strengthen. Wall Street got a bout of mixed data on Tuesday.

The S&P/Case-Shiller gauge of home prices in 20 U.S. cities slid 1.2% in October from September on a non-seasonally adjusted basis, a bigger decline than the 0.5% economists forecast. Home prices dipped 3.4% from the same month last year.

The housing market has been slow to recover as housing prices and demand have remained subdued, while supply has remained high.

"Given the imbalance between prices, supply and demand, declines in prices should not be surprising and indeed, we believe that further price declines still lay ahead," Dan Greenhaus, chief global strategist at BTIG wrote in an e-mail.

Meanwhile, the Conference Board’s measure of consumer confidence climbed to 64.5 in December from a revised 55.2 in November. Economists expected a reading of 58.3 for the month. The gauge is now at an 8-month high as consumers feel more comfortable about the labor market and their financial situation.

These data suggest "as long as labor market conditions continue to improve, consumers should continue upgrading their assessment of current and future economic conditions," Cooper Howes, an economist at Barclays Capital wrote in a note to clients.

Confidence in the economy tends to be a key variable in consumers' buying decisions, meaning these data could have an outsized affect on retailers.

U.S. markets were closed on Monday for the Christmas holiday.

In the foreign exchange market, the euro rose 0.1% to $1.3074, while the greenback fell 0.16% against six trading partners.

In metals, gold slid $10.50, or 0.65%, to $1,596 a troy ounce. The benchmark 10-year U.S. Treasury note yields 2.017% from 2.031% as traders bought the safe-haven asset.

Corporate News

General Electric’s (NYSE:GE) GE Capital unveiled plans to scoop up $7.5 billion in deposits and most of MetLife’s (NYSE:MET) bank deposit business as the largest U.S. life insurer looks to exit the heavily-regulated lending business ahead of Dodd-Frank.

Foreign Markets

European blue were essentially unchanged and the German DAX gained 0.18% to 5,890. In Asia, the Japanese Nikkei 225 fell 0.46% to 8,441.

The London and Hong Kong stock exchanges are closed for holidays.