Hit by more warnings about lower second-quarter earnings, stocks recovered from lows but still finished down during an abbreviated session on Tuesday.
Late Monday, Dow component DuPont (DD) warned its second-quarter earnings would miss analysts' estimates, adding its name to other chemical companies that have said profits would take a hit in the economic downturn. Shares of DuPont lost more than 2%.
"Today's story is earnings disappointments, but it's not tomorrow's story," Stuart Schweitzer, a global investment strategist for JP Morgan Fleming Asset Management, told Standard & Poor's research unit. Schweitzer added corporate earnings won't rebound for six to eight months, but the market will start to discount a turnaround sooner. For next year, he expects corporate earnings to be up about 10%, versus a 10% decline this year.
In other corporate news, the European Union blocked General Electric Co.'s (GE) $41 billion purchase of Honeywell International Inc. (HON) on Tuesday. The veto was widely expected after the American companies failed to allay European fears the deal would create an unfairly dominant position. Shares of GE finished modestly lower, while Honeywell ended higher.
And in Vienna, OPEC producers agreed to leave oil supply limits unchanged, as expected, amid rising expectations of an imminent resumption of U.N.-supervised Iraqi exports. Oil futures were higher after the news.
The Dow Jones Industrial Average ended down 22.55 points, or 0.21%, to 10,571.17. The Nasdaq Composite shed 7.86 points, or 0.37%, to 2,140.86. Meanwhile, the broader S&P 500 index lost 2.25 points, or 0.18%, to 1,234.46. The market closed early at 1 p.m. ET in advance of Wednesday's Independence Day holiday.
U.S. Treasuries ended lower on stronger-than-expected factory orders data. U.S. factory orders increased 2.5% in May to a seasonally adjusted $343.67 billion following a 3.4% decline in April, the Commerce Department said. May's rise was the third increase in the last four months.
European markets ended lower. In London, the Financial Times-Stock Exchange 100 index lost 76.80 points, or 1.34%, to 5,639.90. In Germany, the DAX Index shed 45.14 points, or 0.74%, to 6,064.36. And in France, the CAC 40 was down 90.73 points, or 1.71% to 5,205.78.
In Asia, markets finished higher. The Nikkei gained 66.23 points, or 0.52%, to 12,817.41, partially aided by positive U.S. economic data. In Hong Kong, the market added 142.22 points, or 1.09%, to 13,184.75. By Heesun Wee in New York