Stock Market Story: July 3

Alexandra Zendrian

NEW YORK (TheStreet) -- U.S. stocks began Tuesday's shortened trading day flat following a mixed close for the major indices during the previous trading session.

The Dow Jones Industrial Average was falling a little more than 4.5 points, or 0.04%, to 12,867. The S&P 500 was gaining about half a point, or 0.05%, to 1,366. The Nasdaq Composite was rising about 1.5 points, or 0.05%, to 2,952.77.

U.S. stock markets will close Tuesday at 1 p.m. EDT. They will be closed completely on Wednesday for the Independence Day holiday.

U.S. stocks ended mixed Monday with the Dow losing nearly nine points while the S&P 500 and the Nasdaq Composite both posted gains following a weaker-than-forecast report that showed manufacturing activity slowed for the first time in about three years.

Traders do not anticipate high volume on Tuesday due to the shortened day and holiday break on Wednesday.

"The reason that you might see a little bit of a selloff is that it's the beginning of third quarter," explained Oliver Pursche, president of Gary Goldberg Financial Services. "You typically don't want to hold any volatile positions for 36 hours when there's still geopolitical risk out there. You don't want the exposure while the rest of the world is functioning since July 4th is an American holiday. There is the risk that some political news could leave you on the wrong side of the trade on Thursday."

On the geopolitical front, Pursche said he will be watching news from Europe to see if it seems that all countries are amenable to last Friday's announcement regarding the use of bailout funds.

On the U.S. economic calendar Tuesday, factory orders will be reported at 10 a.m.; economists expect a rise in May factory orders of 0.4%, compared with a 0.6% decline in April. Car and truck sales will be reported throughout the day.

After the July 4 holiday, there will be a series of important economic reports, including nonfarm payrolls on Friday. Pursche said he anticipates that traders will wait until this data comes out before making investment decisions.

"The pattern so far has been wait until the data is released," Pursche said. "There hasn't been a lot of trading in front of the tape because of unpredictability of the data."

The FTSE in London was rising 0.34% to 5660.07 while the DAX in Germany was up 0.64%. Hong Kong's Hang Seng index rose 1.51% to 19,735.53; the Nikkei in Japan ended Tuesday with a gain of 0.7%, closing at 9066.59.

August crude oil futures were rising $3.16 to $86.91 a barrel. August gold futures were gaining $20.30 to $1618.00 an ounce.

The benchmark 10-year Treasury was down 4/32, raising the yield to 1.604%, while the dollar was up 0.17%, according to the dollar index.

Barclays(:BCS) CEO Bob Diamond has resigned, making him the second official to leave the bank after an alleged interest-rate rigging scandal.

Chairman Marcus Agius will head the search for Diamond's replacement. Agius resigned Monday after the bank's $453 million settlement of an investigation into alleged interest rate manipulation.

Shares of Barclays ticked up slightly to $10.80.

Microsoft(:MSFT) announced plans Monday to record an asset impairment charge of $6.2 billion on its acquisition of aQuantive.

Microsoft's 2007 deal for aQuantive was valued at $6.3 billion.

The charge is to be recorded in the company's results for the fiscal fourth quarter that ended in June.

Microsoft shares were falling a little less than 1% to $30.26.

-- Written by Alexandra Zendrian

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