Stocks Snap Losing Streak
NEW YORK ( TheStreet) -- The major U.S. equity indices finished with slight gains Tuesday as the financial and technology sectors caught a bounce.
Wall Street was able to look past Spain's deepening funding worries for a day, and bonds -- still hovering at historically low yields -- saw some mild selling. It was a light day for economic data with the latest read on business activity in the U.S. services sector coming in a hair above expectations.
The Dow Jones Industrial Average added 26 points, or 0.22%, to close at 12,128. The positive finish snapped a four-day losing streak for the blue-chip index, which is now down 0.7% year-to-date.
Aside from the financials and technology, the consumer cyclical and basic materials sectors showed some strength. In the broad market, winners were outpacing losers by close to a 3-to-1 ratio on the New York Stock Exchange, and a 2-to-1 ratio on the Nasdaq.
After weak services sector reads out of the eurozone, investors were cautious ahead of the U.S. data. The Institute for Supply Management's services index rose to 53.7 in May from 53.5 in April. The consensus estimate was for a read of 53.1. A reading above 50 indicates expansion.
"The service sector came out a little better than market expectations and all the components except for that of employment improved somewhat," said Peter Cardillo, chief market economist at Rockwell Global Capital. "That was a little bit of a relief. The impetus for the market moving higher is that we held 1275 at the close yesterday on the S&P. From technical viewpoint, the market is trying to stabilize and probably indicating that the worst of the decline is behind us."
But while the slight increase was better than a miss, Paul Ashworth, chief U.S. economist at Capital Economics , wasn't all that impressed.
"The trivial increase in the ISM non-manufacturing index to 53.7 in May, from 53.5, will provide a little comfort to those concerned that the global economic slowdown is now undermining the US economic recovery," he wrote. "Both the manufacturing and non-manufacturing ISM indices appear to be holding well above the 50 mark. Indeed, at that level the non-manufacturing index would be consistent with GDP growth of around 2%. Nevertheless, it's also worth remembering that index was up at 57.3 in February and pointing to GDP growth of more than 3%."