New York: US stocks were little changed on Tuesday after data showed manufacturing expanded for a tenth straight month, but worries of wider fallout from the oil spill in the Gulf of Mexico kept a lid on gains.
In addition to the stronger-than-expected manufacturing data for May, construction spending recorded its largest gain in nearly 10 years in April, government data showed.
But the energy sector dragged on the market, with the S&P Energy index down more than 2% after BP Plc failed in its latest attempt to stem the Gulf of Mexico oil spill.
The positive economic data was also tempered by concerns that global economic growth will be hurt by the euro zone’s debt crisis, said Alan Lancz, president of Alan B. Lancz & Associates Inc in Toledo, Ohio. Indeed, data showed a more sluggish pace in euro zone manufacturing, while the rate of China’s factory output eased and weighed on US stocks in morning trade.
“The US economy is continuing to grow and prospects look bright. It’s just investors are worried about the influence Europe will have on both Asia and our economy as the contagion progresses,” said Lancz.
The Dow Jones industrial average added 25.92 points, or 0.26%, to 10,162.55. The Standard & Poor’s 500 Index eased 3.01 points, or 0.28%, to 1,086.40. The Nasdaq Composite Index was off 0.93 points, or 0.04%, at 2,256.11.
Among energy stocks, US-listed shares of BP tumbled 13% to $37.38. BP will start a new and risky attempt to place a cap over the leak to funnel oil to the surface.
Halliburton Co slumped 12.6% to $21.71 after Goldman Sachs removed the oilfield services company from its “conviction buy list,” citing short-term concerns related to the oil spill and the moratorium on deep-water drilling.
Investors are worried about a wider impact on the sector if drilling becomes more regulated in light of the spill, said Lancz.
Tech shares were among the biggest gainers with Apple Inc rising 2.9% to $264.35 as a successful international launch of its iPad prompted analysts to raise earnings and sales estimates.
In merger news, ev3 Inc jumped 17.5% to $22.23 after Covidien Plc agreed to buy the maker of stents and other vascular devices for $2.6 billion. Covidien shares slipped 1.4% to $41.78.
On the New York Stock Exchange, decliners outpaced advancers by almost 2 to 1.