U.S. stocks retreat from recent highs
By Donna Kardos Yesalavich, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks opened slightly lower Tuesday, retreating from Monday's 15-month highs as investors awaited key housing and auto-sales data before making any major bets.
TODAY'S TOP MARKET STORIES
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The Dow Jones Industrial Average (INDEX:INDU) was down 41 points, or 0.4%, to 10,542. International Business Machines (NYSE:IBM) led the declines, off 1.2%. Travelers Cos. (NYSE:TRV) also weighed, down 0.7%. United Technologies Corp. (NYSE:UTX) fell 0.7%.
Kraft Foods Inc. (NYSE:KFT) kept the Dow's declines in check. It rose 3.3% after the food giant announced plans to sell its frozen-food business to Nestle (SIX:CH:NESN) and lift the cash component, but not overall offer, for Cadbury PLC (NYSE:CBY) (LSE:UK:CBRY) . Nestle took itself out of the running for buying all or part of Cadbury.
Meanwhile, Warren Buffett's Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) said it voted "no" on Kraft's proposal to authorize the issuance of up to 370 million shares to facilitate the acquisition of Cadbury. American depositary shares of Nestle, which is not a Dow component, slipped 2.4%. Cadbury, also not a Dow component, fell 3.6%. Read more about Kraft's bid.
The technology-heavy Nasdaq Composite Index (NASDAQ:COMP) declined 0.2%. The Standard & Poor's 500 Index (INDEX:SPX) fell 0.1%, with all of its sectors in the red except materials. The consumer-discretionary and technology sectors led the measure's declines.
Meanwhile, the dollar strengthened against the euro but was lower against the yen. Treasurys rose, with the 10-year note recently up 5/16 to yield 3.784%. Gold futures and crude-oil futures rose.
The action comes a day after stocks started the new trading year on a strong note, with the Dow and S&P 500 reaching new 15-month highs and the Nasdaq climbing to a 16-month high as better-than-expected manufacturing data spurred a round of buying in riskier areas of the market.
But Tuesday, investors grew hesitant to make any bold bets ahead of expected reports on factory orders, pending-home sales and motor-vehicle sales.
"People are going to sit back a little today and wait to see what the market does," said Andrew Neale, portfolio manager at wealth-management and advisory firm Fogel Neale Partners. "There doesn't seem to be any follow-through from yesterday."
Neale said his firm is "still positive on the market." He expects a correction of 5% to 10% at some point this year, but sees an upward bias to the market and is encouraging clients to buy stocks selectively.