US stocks flat after early gains on retail sales data

August 15, 2012 | 13:31
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US stocks gave up early gains helped by a better-than-expected reading on retail sales to close flat Tuesday, with the Dow held up by a strong performance from Home Depot.

Traders work on the floor of the New York Stock Exchange on August 8. US stocks gave up early gains helped by a better-than-expected reading on retail sales to close flat Tuesday, with the Dow held up by a strong performance from Home Depot. (AFP Photo/Stan Honda)

But a poor report from online discount coupon vendor Groupon pulled it and other social media shares sharply lower, with Groupon ending down 27.0 percent.

The blue-chip Dow Jones Industrial Average ended up 2.71 points (0.02 percent) to 13,172.14, after having surged around 53 points in early trade.

The broader S&P 500-stock index slipped a bare 0.19 (0.01 percent) to 1,403.92.

But Groupon's plunge helped pull the tech-rich Nasdaq lower, the index giving up 5.54 points (0.18 percent) to 3,016.98.

"Another day of thin volume contributed to a narrow intraday range as the S&P 500 drifted to a flat finish," said Briefing.com.

The market got an early boost from the Labor Department's report

US retail sales rose by a better-than-expected 0.8 percent in July, breaking a three-month losing streak and offering hope of faster growth in the third quarter, official data showed.

Home Depot, the big-box home improvement chain, ended 3.6 percent higher after reporting a 12 percent increase in second quarter earnings and raising its full-year earnings forecast.

Beauty products company Estee Lauder surged 9.3 percent after beating forecasts for its fiscal fourth quarter with a 25 percent rise in profits.

Groupon shares lost more than one quarter of their value after the company's quarterly earnings report led to a number of analyst downgrades of the stock.

It reported a profitable quarter, but revenues missed expectations and the company's forecast for the current quarter disappointed.

Groupon went public in November 2011 with an issue price of $20.

It pulled down other recent social networking plays on the market: Facebook lost 5.7 percent, Angie's List sank 16.0 percent, and Yelp fell 6.6 percent.

Manchester United shares continued to tread above Friday's IPO price of $14, pushing to $14.48 in opening trade before settling back to close at $14.20

US bond prices fell. The 10-year Treasury yield rose to 1.73 percent from 1.65 percent Monday; the 30-year gained to 2.83 percent from 2.74 percent. Bond yields move inversely to prices.

AFP

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