MARKET REPORT : Stocks mixed on earnings anxiety
Posted on Wednesday, January 14, 2009
NEW YORK - Wall Street's growing angst about company earnings gave stocks a mixed finish Tuesday, with the Dow Jones industrials suffering their fifth straight loss. Broader market indicators closed modestly higher.
The Dow fell 25.41, or 0.30 percent, to 8,448.56.
The Standard & Poor's 500 index rose 1.53, or 0.18 percent, to 871.79, while the Nasdaq composite index rose 7.67, or 0.50 percent, to 1,546.46.
The Russell 2000 index of smaller companies rose 4.99, or 1.06 percent, to 473.79.
Losing stocks outnumbered gainers by about 8 to 7 on the New York Stock Exchange, where consolidated volume was 4.91 billion shares.
The concern on Wall Street is that the recession will have a more severe effect on profits than investors have been anticipating.
They shied away from placing big bets after aluminum giant Alcoa Inc. reported late Monday that it lost $1.19 billion during the fourth quarter. An analyst's warning about profit at General Electric Co. only added to the market's uneasiness.
Questions about earnings - in particular companies' expectations for this year - are likely to dominate trading in the coming weeks. Computer chip maker Intel Corp. and drug company Genentech Inc. are among the companies reporting results this week.
The market also will get an earlier-than-expected reading on the financial sector when JPMorgan Chase & Co. reports earnings Thursday, nearly a week ahead of schedule. Investors are fearful of another year of multibillion-dollar losses among financial companies, as analysts forecast mounting problems in credit card and commercial real estate portfolios.
Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.30 percent from 2.31 percent late Monday. The yield on the threemonth T-bill, considered one of the safest investments, rose to 0.12 percent from 0.06 percent late Monday.
The dollar was mixed against other major currencies, while gold prices advanced.
Light, sweet crude rose 19 cents to settle at $37.78 on the New York Mercantile Exchange after tumbling 8 percent Monday.
Worries about earnings weighed on stocks. Alcoa fell 51 cents, or 5.1 percent, to $9.55. GE fell 89 cents, or 5.6 percent, to $14.94 after an analyst raised concerns about the strength of the company's fourth-quarter earnings results and attempts to maintain its top credit rating.
The market got some upbeat news that lent support to stocks early in the day before sellers reentered the market. The Commerce Department said the trade deficit fell to its lowest level in five years.
The deficit narrowed 28.7 percent to $40.4 billion in November from $56.7 billion in October as demand for oil dropped by a record amount.
Though demand for imports has dropped, investors are more concerned by the waning need for American products overseas as economies around the world suffer. The fear is that as companies struggle with falling global demand, it will be more difficult for the economy to rebound.
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