THE S&P 500 and the Dow Jones industrial average closed slightly lower yesterday as investors continued to await clarity on European Central Bank plans to shore up heavily indebted countries, but the market ended off its lows on a rally in Apple shares.
The Dow Jones was down 54.90 points, or 0.42 per cent, at 13,035.94. The Standard & Poor’s 500 Index was down 1.64 points, or 0.12 per cent, at 1,404.94.
The Nasdaq Composite Index was up 8.09 points, or 0.26 per cent, at 3,075.06.
Equities were lower for much of the session, with industrial and material names weak after a report showing manufacturing contracted by its fastest pace in more than three years. Telecom and consumer staples, two groups that tend to outperform during periods of uncertainty, led on the day.
Markets remain skittish ahead of the ECB’s meeting tomorrow, where ECB president Mario Draghi is expected to unveil plans to lower borrowing costs for countries such as Spain and Italy, whose bond market troubles are the latest front in the region’s debt crisis.
“We’re not going to get any definitive direction so long as everyone is waiting around on the Fed and ECB,” said Michael Vogelzang, who helps oversee $2.2bn as president at Boston Advisors. “Things seem very soft right now, and until that changes the market may have a hard time getting out of the range we’ve been in.”
Apple, which as the largest US company has an outsized impact on indexes, rose 1.5 per cent to $674.97 and helped erode broader losses yesterday. Earlier, the tech giant distributed invitations to an event in San Francisco on 12 September, setting the stage for what is widely expected to be the release of the iPhone 5.
US manufacturing contracted for a third straight month in August while firms in the sector hired the fewest workers since late 2009, according to an Institute for Supply Management survey. The data followed similar disappointing readings on manufacturing elsewhere in the world. The Morgan Stanley cyclical index fell 0.9 per cent.
The S&P materials sector index lost 1.5 per cent while industrial stocks fell 0.9 per cent. Separate data also showed US construction spending in July fell by the most in a year as both the private and public sectors cut back on investment, according to a report that could dampen hopes of a pick-up in economic activity in the third quarter.
In company news, Valeant Pharmaceuticals International agreed to buy Medicis Pharmaceutical for $2.6bn in cash. Valeant shares climbed 15 per cent to $58.78 while Medicis surged 38 per cent to $43.65.