In Lackluster Session, Stocks Finish Mixed
Wall Street waffled through an uninspired session Tuesday, leaving stocks narrowly mixed as investors digested the first big batch of second-quarter earnings reports.
Technology stocks mostly were lower, and the sector may be poised for further declines today in the wake of Intel’s disappointing profit outlook issued after regular trading ended.
The tech-dominated Nasdaq composite index dipped 5.26 points, or 0.3%, to 1,931.66, its lowest close since May 24.
The Dow Jones industrial average edged up 9.37 points, or 0.1%, to 10,247.59, and the Standard & Poor’s 500 index added 0.79 point, or 0.1%, to 1,115.14.
Advancing issues had a narrow edge over losers on the New York Stock Exchange. It was the opposite on Nasdaq.
Wall Street was given some lift by a Commerce Department report showing that the nation’s trade deficit narrowed to $46 billion in May, dropping 4.5% from April’s all-time high. U.S. exports had their best month on record, the department said, helped in part by the dollar’s slide over the last year.
However, investors’ focus remained primarily on earnings.
Johnson & Johnson, one of the 30 Dow stocks, rose 49 cents to $55.38 after the healthcare giant said it earned $2.5 billion in the quarter and beat Wall Street estimates by 3 cents a share.
On the downside, brokerage Merrill Lynch slid $1.67 to $49.80 after its second-quarter profit fell short of expectations.
After regular trading ended, Intel reported strong second-quarter results but said its profit margin would be under pressure in the second half.
Intel shares, off 10 cents at $26.14 in regular trading, dropped as low as $24.85 after hours.
Doug Sandler, chief equity strategist at Wachovia Securities, said the broad market’s decline in recent weeks could mean that the prices of many stocks now have lowered profit expectations built in -- which could set the scene for a rally, he said.
In other trading Tuesday, the yield on the benchmark 10-year U.S. Treasury note rose to 4.47% from 4.45% Monday. Yields were pushed up in thin trading as investors worried that inflation reports due later this week could show rising price pressures.
The government will report on June wholesale prices on Thursday and June consumer prices on Friday.
Oil prices were little changed, falling six cents to $39.44 a barrel in New York.
In other market highlights:
* Other drug stocks were mixed after Johnson & Johnson’s report. Pfizer climbed 54 cents to $34.16 and Schering-Plough rose 66 cents to $18.21, but Merck eased 12 cents to $45.55.
* Newspaper publisher Gannett announced earnings that were in line with estimates, boosting profit 9% from a year earlier. But Media General, which runs broadcast stations and newspapers, missed its estimates by 6 cents a share. Gannett climbed 99 cents to $82.38; Media General lost 8 cents to $62.52.
* Among other companies reporting earnings, fastener maker Fastenal surged $5.22 to $59.63, while online marketing firm Travelzoo slumped $4.55 to $25.20 and financial services firm State Street dropped $4.56 to $44.95.
* In the tech sector, Juniper Networks fell 28 cents to $22 before reporting a second-quarter loss. But excluding one-time items its profit beat expectations, and the company also raised its outlook for the second half. The stock jumped to $24.15 in after-hours trading.
* Elsewhere in the tech arena, Cisco Systems was off 15 cents at $22.14 and Microsoft fell 29 cents to $27.60.
* Brokerage stocks were mostly lower with Merrill Lynch. Lehman Bros. slid $1.13 to $70.95 and Bear Stearns was off 97 cents at $84.79.
* Allergan plunged $5.16 to $76.75 one day after the Irvine company was told that its oral psoriasis drug was rejected by a Food and Drug Administration advisory panel because it could cause birth defects when used by pregnant women.
* Foothill Ranch-based Oakley dropped 94 cents to $11.60. The sunglass maker on Monday warned of weaker-than-expected 2004 earnings.
* Airline stocks were mostly lower, in part on word of new fare cuts. Delta slid 66 cents to $6.09, JetBlue lost $1.19 to $25.52, Alaska Air was down $1.04 to $21.11 and AMR, parent of American Airlines, fell 42 cents to $9.93.
* Domino’s Pizza slipped 50 cents to $13.50 in its first day of trading on the NYSE. The pizza delivery giant went public at $14 a share on Monday.
