U.S. stocks ended mixed on Tuesday as weaker-than-expected ISM Services PMI report and hawkish Fed meeting minutes weighed on the sentiment.
The Dow Jones Industrial average declined 6.13 points, or 0.05 percent, to end at 12,393.90. The S&P 500 fell 0.24 points, 0.02 percent, to close at 1,332.63. The Nasdaq Composite gained 0.02 percent.
The Institute for Supply Management said the services sector expanded in March for the 16th straight month, but its index of non-manufacturing activity declined to 57.3 from 59.7 in the previous month, while analysts expected a reading of 59.5.
A moderate sell-off occurred in the afternoon after the Federal Reserve released minutes of its March 15 meeting. It didn’t contain major surprises and confirmed that while some hawks on the rate policy committee want to possibly cut short the Fed’s program of quantitative easing, the majority disagree and see no reason to adjust the size.
On the corporate front, National Semiconductor Corp. (NYSE:NSM) shares climbed 71 percent and Texas Instruments (NYSE:TXN) gained 1.7 percent after Texas Instruments said it agreed to buy NSM for $6.5 billion, or $25 per share, a deal that combines two industry leaders in analog semiconductors, each with unique strengths in delivering products to improve performance and efficiency and convert real-world signals in electronic systems.
Apple Inc. (NASDAQ:AAPL) stock moved down 0.67 percent to $338.89. The company's weighting in the Nasdaq-100 Index was cut as it had its first major reshuffle since 1998 to better reflect companies’ market value. Apple’s representation will be reduced to 12.33 percent of the index on May 2, from 20.49 percent, Nasdaq OMX Group Inc. (NDAQ) said in a slide show on its website. While Microsoft (NASDAQ:MSFT) rose 0.90 percent and Cisco (NASDAQ:CSCO) gained 0.94 percent as their weighting will be increased.
Meanwhile, China’s central bank surprised the markets by raising interest rates for the fourth time since October last year. The People's Bank of China raised its key interest rates by 25 basis points to 3.25 percent to curb inflation.