Stock market dips after report of Egyptian turmoilThat development overshadowed good news about car sales, home prices and manufacturing, which led the market higher in the morning.
By: Steve Rothwell, Associated Press
NEW YORK — The stock market turned negative in early afternoon trading today on news reports of political turmoil in Egypt.
Stocks had traded higher most of the day on positive news about the U.S. economy. But around 12:40 p.m. CDT, the market dipped below Monday's close. News emerged that Egypt's military had drawn up plans to suspend the country's constitution, dissolve its legislature and set up an interim government.
That development overshadowed good news about car sales, home prices and manufacturing, which led the market higher in the morning.
The Standard & Poor's 500 index had climbed as much as 9 points, or 0.6 percent, to 1,624. By 2:11 p.m. the stock index was down three points, or 0.2 percent, at 1612.
The Dow Jones fell 75 points, or 0.5 percent, to 14,899. The Nasdaq composite slipped 10 points, or 0.3 percent, at 3,423.
Seven of the 10 industry groups in the S&P 500 fell, led by banks.
Crude oil moved higher after the political situation in Egypt worsened. It rose almost $1 after the news broke, trading at $99.60 a barrel. That was $1.60 above its final price the day before.
Meanwhile, Ford's stock jumped 40 cents, or 2.5 percent, to $16.13, after it reported its best June sales since 2006.
Earlier, reports showed that U.S. factory orders rose in May, helped by a third straight month of stronger business investment. Orders rose 2.1 percent and April's increase was revised higher to 1.3 percent from 1 percent, the Commerce Department said.
U.S. home prices jumped 12.2 percent in May from a year earlier, the most in seven years, according to real estate data provider CoreLogic. The increase suggests the housing recovery is strengthening.
Investors and traders are also turning their focus to corporate earnings, which begin in earnest next week. While corporate profits have reached record levels, most of the gains have come from cutting costs rather than increasing sales.
“We're in the middle of a transition,” said Chris Wolfe, chief investment officer at Merrill Lynch Private Banking and Investment Group. “You would expect to see, over the balance of this year and going into next year, somewhat stronger macro-economic data that translates directly into stronger corporate revenue growth.”
Alcoa, the first company in the Dow to report its earnings, will release its second-quarter earnings report after the market closes July 8.
In government bond trading, the yield on the 10-year Treasury note dipped to 2.47 percent from 2.48 percent on Monday. The yield has stabilized after surging as high as 2.66 percent last week, on concern that the Fed was set to stop buying bonds.