U.S. stocks edge higher, weighed down by energy sector

NEW YORK —
U.S. stocks inched higher Tuesday as consumer companies rose on
improved consumer confidence and a slowdown in the pace of home-price
declines, but the gains were largely offset by slumping energy stocks
ahead of oil inventory data.

The Dow Jones Industrial Average was up 21 points,
or 0.2 percent, to 10,568 in recent trading. If the measure remains
higher through the close, it will mark the Dow’s seventh-straight
session of gains and push the measure to another new closing high for
the year. Walt Disney Co. was the Dow’s best performer, up 1.6 percent. Microsoft Corp. and 3M Co. were also strong. Microsoft climbed 0.9 percent, while 3M gained 0.8 percent.

The Dow’s energy components kept its gains in check as the market awaited oil and fuel inventory data from the American Petroleum Institute after settlement Tuesday, as well as official government data Wednesday. Chevron Corp. dropped 0.5 percent, while Exxon Mobil Corp. slipped 0.2 percent.

The Nasdaq Composite Index was down less than a point. The Standard & Poor’s
500 Index edged up less than a point. Its consumer staples, consumer
discretionary and industrials were strong, but the measure’s energy and
financial sectors weighed.

Crude-oil futures edged higher recently after
slumping earlier in the session. Gold futures, meanwhile, remained
lower. The dollar strengthened, with the U.S. dollar index —
representing the greenback against a basket of six currencies — up 0.3
percent. Treasurys also moved higher, with the 10-year note recently up
5/16 to yield 3.811 percent, following a better-than-expected auction
of 5-year notes.

Tuesday’s action comes on particularly light stock-trading volume. New York Stock Exchange
composite volume was just under 2 billion shares when the final hour of
Tuesday’s session began. The 2009 daily average is about 5.9 billion
shares.

Among the day’s economic releases, the Conference
Board’s index of consumer confidence increased this month and came in
close to economists’ projection, while the latest S&P Case-Shiller
report showed the decline in home prices slowed down in October.

Nevertheless, Barry James, president and chief executive of James Investment Research, remains concerned about the consumer due to still-high unemployment levels.

“Consumers have licked their wounds as they’ve seen
the market come back and some stability in housing, but the biggest
concern, of course, is jobs, and that has people leery,” James said. He
noted that consumer debt levels have been decreasing as spending
remains weak.

In turn, James said he has gotten more defensive
with investment decisions and currently favors stocks that pay
dividends and have international exposure.

“We’re lowering equity levels and hunkering down,”
he said. “There’s a lot of pieces of the puzzle that show we’re in a
higher-risk area right now.”