Week Starts With Lackluster Session
Wall Street meandered through a listless session Monday, closing narrowly mixed while investors awaited the start of fourth-quarter corporate earnings reports.
In commodities trading, oil prices rebounded on doubts that higher crude production by key nations will help bolster the supply picture soon.
On Wall Street the market began the day with a rally, but it quickly faded. The Dow Jones industrial average, up as much as 85 points early on, closed with a gain of 1.09 points to 8,785.98.
The Nasdaq composite ended down 1.68 points at 1,446.04.
Analysts said the market could be stuck in neutral for a few sessions as it digests the gains of the first seven trading days of the year. Stocks got a lift at the start of the year as investors focused on President Bush’s plan to bolster the economy and eliminate taxes on dividends that companies pay shareholders.
The Dow is up 5.3% this year after falling 17% last year. Nasdaq is up 8.3% after plunging 31.5% last year.
The market’s next hurdle will be fourth-quarter earnings reports. A number of major companies will report results this week. Among them: Bank of America on Wednesday and General Motors on Thursday. Microsoft also will report results Thursday.
The market held up well Monday despite negative news on the earnings front, analysts said.
Duke Energy shares plunged $3.13 to $17.87 after the utility giant said profit fell more than forecast in 2002 because of a slump in power prices and electricity trading.
Net income fell as low as $1.20 a share after deducting 65 cents a share in expenses to repair ice-storm damage, pay severance and write down some assets, the company said. Excluding those expenses, profit was about 10 cents a share less than analysts’ average forecast of about $1.95, the company said.
Duke’s chief executive, Richard Priory, also said he has a “fairly pessimistic” view of 2003.
Paper giant Georgia-Pacific slid $1.38 to $16.58 after it warned that it would record a loss in the fourth quarter because lumber prices fell and the company increased its reserves for asbestos-related medical claims.
“We’re at the cusp of the earnings season, and people aren’t sure what it’s going to look like. That creates hesitation,” Mark Foster, chief investment officer at Kirr, Marbach & Co., told Bloomberg News.
Still, winners topped losers by 17 to 16 on the New York Stock Exchange. Losers led by a sliver on Nasdaq.
In oil trading, February futures rose 57 cents to $32.25 a barrel in New York, the highest closing price in a week.
The Organization of the Petroleum Exporting Countries on Sunday agreed to boost production targets by 6.5% next month to make up for export disruptions in Venezuela caused by a strike. But tankers take at least six weeks to reach U.S. refineries from Saudi Arabia, which has more spare capacity than other OPEC members.
“We’ve got supply problems, and it doesn’t look like they’ll be solved anytime soon,” Ed Silliere, vice president of risk management at Energy Merchant in New York, told Bloomberg News.
Among Monday’s highlights:
* Utility stocks were broadly lower with Duke. American Electric Power lost $1.34 to $27.09, and Consolidated Edison fell $1.42 to $42.45.
* Some paper and lumber stocks rose despite Georgia-Pacific’s announcement. International Paper was up 28 cents to $37.93. Temple Inland added 22 cents to $48.75.
* Dell Computer sank $1.17 to $25.98 after J.P. Morgan downgraded it to “neutral” from “buy,” citing “an increasingly aggressive industry pricing environment.” Gateway lost 2 cents to $2.98, and Hewlett-Packard fell 49 cents to $20.36.
* AOL Time Warner rose 15 cents to $15.03 on news that Chairman Steve Case was stepping down.
Market Roundup, C9-10
