Reuters | Wall Street was flat in choppy trade Tuesday after relinquishing early gains, as euro-zone concerns offset reassuring comments from Federal Reserve Chairman Ben Bernanke on the state of the U.S. economy. Oak Brook-based McDonald’s Corp dipped 0.8 percent to $66.25, after the fast-food chain
reported a stronger-than-expected rise in worldwide same-store sales in
May.
Bernanke said the U.S. economy seemed to have enough momentum to avoid a
“double-dip” recession, while European leaders were committed to
ensuring the survival of the euro and had enough money to meet
obligations of heavily indebted member nations.
Financial markets
remained anxious about debt levels in several euro zone countries, as
Portugal, Italy and Spain prepared to sell new bonds this week. It will
be the first sale by Spain since a credit ratings downgrade.
“What
is happening here is that the worries in Europe tend to be top of mind
for traders and investors. It’s the first thing they think about and not
the second or third thing, so there is nothing positive that can
balance it out as this point,” said Richard Sparks, senior equities
analyst, Schaeffer’s Investment Research in Cincinnati, Ohio.
“Until
we have some clarity there and there is some better news that can
overcome the worries of the unknown, it will be really tough for traders
to have the confidence to step in convincingly and buy this market.”
The
Dow Jones industrial average dropped 10.20 points, or 0.10 percent, to
9,806.29. The Standard & Poor’s 500 Index fell 1.80 points, or 0.17
percent, to 1,048.67. The Nasdaq Composite Index slipped 16.69 points,
or 0.77 percent, to 2,157.21.
The euro used by investors in
recent weeks as a barometer for euro-zone stability, edged up 0.2
percent, a day after the currency hit its lowest level against the
dollar since early 2006.
The increased volatility on Wall Street
in recent weeks has made investors more sensitive, backing away at the
first hint of selling pressure.
Large-cap technology companies
dragged the Nasdaq lower after Bank of America-Merrill Lynch cut price
targets on seven Internet stocks, citing uncertainty over earnings due
to an appreciating dollar since April. Amazon.com Inc was off 2.8
percent to $118.57.
Goldman Sachs Group Inc shed 1.5 percent to
$136.60 after it was subpoenaed by the commission probing the financial
crisis.
Separately, Goldman lowered its view on the deepwater
drilling sector to “neutral” from “attractive” on expectations the
moratorium on deepwater drilling would be extended and bring pressure on
day rates and delayed price hikes.
U.S.-listed shares of
Transocean Ltd slid 9 percent to $44.72, while Diamond Offshore Drilling
Inc dropped 5 percent to $56.20.
