The markets just couldn't get off the ground Tuesday, one day after a riotous party where the Nasdaq Stock Market closed above 2,000 for the first time in nearly two years and the other markets set 21-month highs.
It didn't help when a bevy of economic reports offered lukewarm evidence on the U.S. economy, sending the U.S. dollar down to record lows against the euro and the Canadian dollar to a 10-year high.
Mad-cow seems to have run its course on the markets with little movement on restaurants and meat-packers. Even cattle futures prices showed signs of stabilizing Tuesday. The Chicago exchange was able to fill all sell orders, with the February live cattle contract falling 5 cents (U.S.) a pound to 76.175 cents.
The Dow Jones industrial average fell 24.96 points or 0.2 per cent to 10,425.04 by the close. Nasdaq was up 3.4 points to 2,009.88. It has risen 80 per cent since its six-year low of 1,114.11 on Oct. 9, 2002. The broadly based S&P 500 rose 0.16 points to 1,109.64.
The Toronto Stock Exchange S&P/TSX composite index was no happier. It fell 46.79 points or 0.6 per cent by the close to 8,213.75, while the TSX Venture Exchange composite index was up 11.30 points to 1,738.18.
The euro continued to set record highs against the U.S. dollar, reaching $1.2536 before closing at $1.2518. The Canadian dollar jumped 0.97 cents to 77.26 cents. Gold closed at $416.90 in New York up $1.90 on the day.
A trio of economic reports dampened the markets Tuesday. They were good, but not quite good enough to interest investors after the exciting GDP and labour news of recent months.
The Conference Board said its consumer confidence index fell to 91.3 in December, slightly below the recent peak of 92.5 the month before. The respected economic think tank said consumers will be nervous until jobs catch up with the economy.
The National Association of Purchasing Management-Chicago said business activity in the U.S. Midwest expanded in December for an eighth straight month but at a slower pace than expected. The business measure fell to 59.2 from a strong 64.1 in November.
The National Association of Realtors said sales of existing U.S. homes fell by 4.6 per cent in November, lower than analysts had expected. The association wasn't perturbed because sales are coming down from very high - even torrid - levels.
Sherry Cooper, chief economist with BMO Nesbitt Burns Inc. said the Conference Board results were softer than expected but the other reports were strong. "The data don't show weakness and only mildly suggest less strength than ambitious market expectations," she said in her morning commentary. "The bond market recovered some lost ground on the soft news and stocks sold off. This reaction was appropriate, but measured."
On the shopping front, Ivana Rupcic, an economist with Royal Bank of Canada, said Christmas shoppers came through once again, surpassing last year's Christmas sales by a comfortable margin. Data from Instinet Research's Redbook and the ICSC-UBS chain store sales index showed a 5.5-per-cent increase in pre-Christmas sales over the same period in 2002. "The size of the surge in this past week shows that consumers still have a good deal of spending energy left," she said.
There was little corporate news Tuesday. For the shoppers, Martha Stewart Living Omni was one of the biggest gainers on the NYSE, rising 6.8 per cent after federal prosecutors suffered a minor setback in their attempts to prosecute publisher Martha Stewart. The case goes to trial next month.
Shares of FedEx Corp. fell 1.3 per cent on the NYSE after it announced plans to buy Kinko's chain of copy centres for $2.4-billion (U.S.) and combine the two operations. The 1,200-outlet chain is controlled by private equity firm Clayton, Dubilier & Rice Inc. Kinko's has annual revenue of about $2-billion (U.S.), one-tenth the size of FedEx sales.
Aircraft manufacturer Boeing Co. rose by 0.7 per cent Tuesday after it announced a $9.6-billion sale of fighter jets to the U.S. navy. Volume was 4.9 million shares. The navy has ordered 210 F/A-18 fighters and wants to develop the EA-18G electronic aircraft attack plane.