Stocks zigzag on mixed reports on factory orders and existing home sales

Stocks trade mixed on uneven economic reports

NEW YORK — The stock market zigzagged after a strong report on factory orders and a disappointing showing in home sales gave mixed signals about the economy.

The modest moves Tuesday came a day after the Dow Jones industrials soared more than 150 points on upbeat manufacturing reports in the U.S. and China.

The Commerce Department reported that factory orders rose by more than twice what had been expected in November, reflecting demand in the steel, computer and chemical industries. The gain of 1.1 percent easily beat the 0.5 percent forecast of analysts polled Thomson Reuters.

Meanwhile, the number of buyers who agreed to purchase previously occupied homes fell sharply in November, an indication that sales will fall this winter. The National Association of Realtors said its index of pending home sales fell 16 percent to 96, the first drop after nine months of gains and the lowest reading since June.

Investors are looking for clues about the direction of the economy in 2010 after a nine-month rally pushed stocks to steep gains for 2009. Now, analysts say, further signs of strengthening in the economy are needed to help stocks hold their gains.

Financial, industrial and consumer discretionary stocks rose, while defensive areas like utilities and consumer staples stocks fell.

“At least for today it indicates some mild bullishness,” said Rick Bensignor, chief market strategist at Execution LLC in New York, referring to gains in riskier parts of the market. “If you really thought the market was not going to be up much higher you would not be putting money into these areas.”

In early afternoon trading, the Dow industrials fell 33.71, or 0.3 percent, to 10,550.25. The broader Standard & Poor’s 500 index rose 0.04, or less than 0.1 percent, to 1,133.03, while the Nasdaq composite index fell 4.69, or 0.2 percent, to 2,303.73.

Three stocks rose for every two that fell on the New York Stock Exchange, where volume came to 570.6 million shares compared with 466.1 million shares traded at the same point Monday.

Bond prices rose, pushing yields lower. The yield on the benchmark 10-year Treasury note fell to 3.76 percent from 3.83 percent late Monday.

The dollar mostly fell against other major currencies, while gold prices rose. Crude oil rose 21 cents to $81.72 a barrel on the New York Mercantile Exchange.

In corporate news, airlines rose after Continental Airlines Inc. and United parent UAL Corp. said Monday that their planes were fuller in December. Continental rose $2.06, or 11.4 percent, to $20.20, while UAL rose $1.02, or 8 percent, to $13.82.

Ford Motor Co. said its December sales jumped 33 percent because of demand for midsize cars like the Ford Fusion, whose sales rose 83 percent. Ford also had its first full-year gain in U.S. market share since 1995. Shares jumped 79 cents, or 7.7 percent, to $11.07.

Kraft Foods Inc. said it will revise its hostile takeover offer for British chocolate and gum maker Cadbury PLC, offering more cash funded by the sale of its North American pizza business to Nestle. Kraft rose 82 cents, or 3 percent, to $28.25, while Cadbury fell $1.83, or 3.5 percent, to $48.82.

The Russell 2000 index of smaller companies fell 0.84, or 0.1 percent, to 639.26.

Britain’s FTSE 100 rose 0.4 percent, Germany’s DAX index fell 0.3 percent, and France’s CAC-40 slipped less than 0.1 percent. Japan’s Nikkei stock average rose 0.3 percent.

Augstums reported from Charlotte, N.C.