Stocks waver on Spain report, Mosaic miss

NEW YORK—Mixed signals on the world economy tugged on major US stock indexes yesterday. America's largest fertiliser company, Mosaic, said weak demand from China and India have hurt its profits. Mosaic, Dupont and stocks of other companies in the materials industry fell. But utilities and health care stocks, where investors often retreat in a slow-growing economy, helped pull the Standard & Poor's 500 index above the break-even mark.

The S&P 500 index gained 1.26 to close at 1,445.75. The Dow Jones industrial average dropped 32.75 points to 13,482.36. Dupont led the Dow lower, sinking 86 cents to US$49.50. The market could remain quiet until the government gives its monthly jobs report on Friday, said Paul Zemsky, chief investment officer of multi-asset strategies at ING Investment Management. Economists expect the unemployment rate increased to 8.2 per cent in September from 8.1 per cent in August.

Zemsky said a surprise swing up or down "could change the direction of the stock market and the Presidential election." Indexes took a turn lower at midday after Spain's prime minister said that he's not preparing a request for a bailout loan. Traders have been anticipating that the Spanish government would ask for help for nearly a month. Spain needs to ask for money from Europe's bailout fund before the European Central Bank can start buying Spanish government bonds.

Mosaic reported net income and sales early Tuesday that fell short of analysts' estimates. The company blamed slumping demand for its fertiliser overseas as well as hurricanes for slower production. The results pushed the company's stock down US$2.25 to US$55.76. In other trading, the Nasdaq composite rose 6.51 points to 3,120.04.

The yield on the benchmark ten-year US Treasury note slipped to 1.61 per cent from 1.63 per cent late Monday after Spain’s prime minister, Mariano Rajoy, said a bailout request wasn’t coming. European markets closed slightly lower before Rajoy spoke. Benchmark stock indexes fell 0.3 per cent in Germany, 0.2 percent in Britain and 0.6 percent in France. Borrowing costs fell for Spain and Italy.

Most car makers reported better sales for September. But sales for US automakers were mostly flat. General Motors reported a slight increase in sales from a year earlier, but its stock gained 3 per cent after the hedge-fund manager David Einhorn recommended it. GM rose 59 cents to US$23.68.

Core Logic, a private provider of real estate data, said US home prices in August rose 4.6 per cent compared with the same month last year. Prices also rose 0.3 per cent from July, the sixth consecutive month of gains. Other gauges of the housing market have improved in recent months, including home sales. On Monday, the manufacturing survey from the Institute for Supply Management also showed improvement.