* S&P hits 50-day moving average, stocks fall late in day
* Energy shares up as oil prices jump on Middle East unrest
* Ford Motor shares hit 52-week high after June car sales
* Dow off 0.3 pct, S&P 500 off 0.1 pct, Nasdaq off 0.03 pct
By Angela Moon
NEW YORK, July 2 U.S. stocks edged lower on
Tuesday, erasing earlier gains as the S&P 500 met resistance
around its 50-day moving average, a level the index has not been
able to close above for the past two weeks.
Among the S&P 500's 10 sectors, the energy sector index
rose 0.2 percent after crude oil prices hit a nine-month
high as turmoil in the Middle East unsettled investors.
The S&P's industrial sector index fell 1.1 percent
and ranked as the biggest decliner.
The major U.S. stock indexes traded higher until early
afternoon, boosted by positive car sales and factory orders. The
S&P 500 rose as high as 1,624.26 early in the session.
"We have been seeing this pattern where the market starts
off with strength in the morning session, but drifts a little
lower with some selling in the afternoon session," said Ryan
Detrick, an analyst at Schaeffer's Investment Research, in
He added that with no major news and U.S. markets closing
early on Wednesday and all of Thursday for Independence Day,
traders were adjusting their positions before the all-important
non-farm payrolls report on Friday. Economists have forecast an
increase of 165,000 jobs.
"We saw the market moving to the downside right around that
50-day moving average. It's a bit technical here, but on a day
like today, it's an area that people are looking at closely and
so far, it's been serving as a bit of resistance."
The 50-day moving average for the S&P 500 was 1,623.94. The
benchmark index has not been able to close above its 50-day
moving average since closing below that closely watched
technical level on June 20.
The Dow Jones industrial average fell 42.55 points,
or 0.28 percent, to end at 14,932.41. The Standard & Poor's 500
Index dipped just 0.88 of a point, or 0.05 percent, to
finish at 1,614.08. The Nasdaq Composite Index slipped
1.09 points, or 0.03 percent, to close at 3,433.40.
The CBOE Volatility Index, Wall Street's favorate
barometer of investor anxiety, rose 0.4 percent to 16.44.
Volatility has remained elevated from two weeks ago after
the Fed said it expected to reduce its $85 billion a month of
bond buying, which has helped drive the U.S. stock market's
rally this year. Since those comments, several Fed officials
have said the central bank would not prematurely end its
monetary stimulus program. Those reassuring remarks helped
stabilize the market.
In Tuesday's session, shares of automaker Ford Motor Co
hit a 52-week high of $16.21 after the company and rival
General Motors reported strong sales last month. Ford
said the overall U.S. auto industry will report its best monthly
sales rate since December 2007. Ford's stock shot up 2.8 percent
to close at $16.18 while GM's shares rose 0.3 percent to end at
The S&P 500 is 3.3 percent below its May 21 record closing
high of 1,669.16. Small caps have closed within a hair's breadth
of all-time highs reached in May. The S&P Small-Cap 600
is about 0.8 percent below its all-time closing high, and the
Russell 2000 is 1.1 percent below its best close.
The recent outperformance by stocks with smaller market
capitalizations and higher volatility point to a belief that the
recent rise in interest rates is constructive, despite the S&P
500 edging lower, according to a Monday note from Goldman Sachs
"The negative performance at the index level has been driven
more by positioning and policy uncertainty than a deteriorating
view on economic growth," they wrote.
William Dudley, president of the Federal Reserve Bank of New
York, on Tuesday repeated comments made last week, saying the
central bank is likely to support the economic recovery for some
Shares of alcoholic beverage company Constellation Brands
Inc fell 3.6 percent to $51.25 after its first-quarter
earnings and revenue missed expectations.
Sources said Pfizer Inc and Novartis AG
may make preliminary bids for Onyx Pharmaceuticals Inc.
On Sunday, Onyx turned down a roughly $10 billion offer from
Amgen Inc. Onyx shares rose 3.2 percent
to close at $135.58 after hitting a 52-week high of $135.69. The
stock gained more than 50 percent in Monday's session.
About 6.1 billion shares exchanged hands on the New York
Stock Exchange, the Nasdaq and NYSE MKT, slightly below the
daily average so far this year of about 6.4 billion.
Decliners outnumbered advancers on the New York Stock
Exchange by a ratio of 3 to 2. On the Nasdaq, nearly 13 stocks
fell for every 12 that rose.