Tuesday, Nov 29, 2011

--Stocks little changed a day after the biggest rally of the month

--Investors await a meeting among euro-zone leaders

--Home prices fell in September, the first decline after five straight monthly increases

--Tiffany shares fall on earnings outlook 


 
   By Steven Russolillo and Tomi Kilgore 
   Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--U.S. stocks opened little changed a day after a sharp rally, as investors awaited a meeting of euro-zone leaders aimed at stemming the region's debt crisis and digested word of AMR's bankruptcy filing.

The Dow Jones Industrial Average gained 3 points, or 0.03%, to 11526. The early gain came after the blue-chip index rallied 291 points, or 2.6%, on Monday. It was the Dow's biggest gain since Oct. 27.

The Standard & Poor's 500-stock index edged down 0.2 point, or 0.02%, to 1192. The technology-oriented Nasdaq Composite dropped 6 points, or 0.2%, to 2521.

European markets were mixed, with the Stoxx Europe 600 edging up 0.1%. Optimism toward a meeting of euro-zone leaders, where changes to the bailout fund are expected to be finalized to stem the debt crisis, offset a report that Standard & Poor's may put France's triple-A credit rating on review for a possible downgrade. Additionally, an Italian bond auction resulted in euro-era high yields as well as higher yields in the secondary market.

Italy paid a yield of 7.89% on the three-year bond, up from 4.93% at its previous auction on Oct. 28. The yield on 10-year bonds rose 0.11 percentage point to 7.30%, well above the level that analysts say is unsustainable over the longer term. That Italy had to offer higher yields on shorter-dated bonds at Tuesday's sale underscores how investors want to be compensated for the risk attached to the country's near-term fiscal outlook.

Investors also reacted to AMR, the parent company of American Airlines, filing for Chapter 11 bankruptcy in New York. The process will allow the carrier to continue normal business operations as it restructures its debt. American Airlines was the only major carrier not to turn a profit last year and appeared set for another full-year loss in 2011. AMR shares were halted.

On the economic front, U.S. home prices eased in September from a month earlier, the first sequential decline after five straight monthly increases, according to Standard & Poor's Case-Shiller home-price indexes.

Still on tap is a reading on consumer confidence for November, due at 10 a.m. EST.

After Monday's closing bell, Fitch Ratings affirmed its triple-A rating on U.S. sovereign debt but lowered its outlook to negative, saying the rating could be endangered by high debt levels and a troubled economic outlook. The move was widely anticipated.

Asian bourses closed broadly higher on the back of Monday's sharp U.S. gains, with China's Shanghai Composite climbing 1.2% and Japan's Nikkei Stock Average adding 2.3%.

Gold futures edged down 0.2% to $1,708.20 an ounce, while crude oil futures ticked up 0.5% to $98.68 a barrel. The U.S. dollar rose against the euro, but fell against the yen.

In corporate news, Tiffany slumped 11% after better-than-expected third-quarter results were overshadowed by the high-end jewelry retailer's disappointing earnings outlook for the current quarter.

Transocean shed 5.8% after the oil services company said it was offering 26 million shares of common stock for sale to the public.

Seagate Technology ran up 5.5% after the hard-disk drive company provided an upbeat revenue outlook for the current quarter. The company also issued a fiscal third-quarter estimate that was above Wall Street forecasts.

-By Steven Russolillo and Tomi Kilgore, Dow Jones Newswires; 212-416-2180; steven.russolillo@dowjones.com

(END) Dow Jones Newswires

November 29, 2011 09:40 ET (14:40 GMT)