Stocks finished lower Tuesday, after a disappointing start to the fourth-quarter earnings season with Monday's report by Dow component Alcoa (AA). Negative news about some key technology names weighed on the market as well.
The Dow Jones industrial average fell 64.81 points, or 0.61%, to 10,556.22. The broader Standard & Poor's 500 index was down 7.26 points, or 0.61%, to 1,182.99. The Nasdaq composite index dropped 17.42 points, or 0.83%, to 2,079.62.
Oil futures finished up 52 cents Tuesday, to $45.85 a barrel.
There is little in the way of economic news Tuesday, but the economic report flow will be heavy later in the week. Topping the list is a reading on Friday on wholesale inflation in December. That number is seen increasing only 0.1% for the month vs. a 0.5% increase in the previous month. Excluding volatile food and energy prices, the gauge is seen ticking up 0.2%, the same amount as in November. December retail sales are due out on Thursday. They are seen increasing 0.4% excluding auto sales vs. a 1.6% rise in the previous month.
After the bell Monday, aluminum giant and Dow component Alcoa (AA) released its fourth-quarter earnings. The company's results fell short of expectations, posting net income from continuing operations of 39 cents a share vs. 39 cents last year.
Genentech (DNA) posted fourth-quarter earnings of 21 cents vs. 14 cents per share last year, fallingshort of expectations. Standard & Poor's reiterated its strong buy rating, while Prudential cut its earnings estimates for the biotech stock.
Convenience-store chain CVS (CVS) announced 4.6% higher same-store sales in December, with an 8.9% rise in total sales.
Williams-Sonoma (WSM) fell short of market estimates, saying it saw 7.3% higher sales during the eight-week holiday period. The boutique retailer cited a weaker response to the Pottery Barn brand, which it owns. Williams-Sonoma reiterated its fourth-quarter guidance.
Discount airline Flyi (FLYI) made a deal with GE's Commercial Aviation unit to provide an early end on leases on 10 regional jets in the first quarter, relieving the company of future rent obligations. The stock traded up 40%.
Some major tech names offered gloomy outlooks Tuesday. Advanced Micro Devices (AMD) said it expects fourth-quarter sales to up only slightly from the third quarter, and for income to be down significantly. Piper Jaffray downgraded the stock. AMD shares were down 19% Tuesday.
In Europe, STMicroelectronics (STM) warned of soft fourth-quarter margins.
Meanwhile, Hewlett-Packard (HPQ) was leading the Dow industrials lower after Morgan Stanley downgraded the stock.
Bucking the trend, chip giant Intel (INTC) reported its highest-ever quarterly revenue after Tuesday's close. Though the chip-maker reported a slight fall in profits, it beat average analyst estimates. The stock moved 2.8% higher in after-hours trading after a 1.5% drop in Tuesday's regular session.
Looking ahead, Apple Computer (AAPL) releases results on Wednesday, followed by Sun Microsystems (SUNW), the server maker, on Thursday.
Taser (TASR) announced it would see some delays in orders in the first half of 2005. The news comes after the beginning of an SEC investigation into the company, and a class-action lawsuit by a New York-based law firm on behalf of investors.
Treasuries finished higher in price Tuesday, with longer-dated issues outperforming. The yield on the benchmark 10-year note moved lower to 4.24%.
In currencies, the dollar sank to 103.34 yen after the head of the European Central Bank said foreign exchange adjustments had gone too far in Europe, and that the solution lies in Asia,
where exchange rate regimes should become more flexible. The euro traded at $1.311.
European stock markets finished lower Tuesday.
In London, the Financial Times-Stock Exchange 100 index lost 22.00 points, or 0.45%, to 4,818.70.
Germany's DAX index fell 49.36 points, or 1.15%, to 4,258.01.
In Paris, the CAC 40 index dropped 28.83 points, or 0.74%, to 3,848.99.
Japanese markets closed up Tuesday, buoyed by gains in tech stocks. The Nikkei average rose 106.75 points, or 0.93%, to 11,539.99. In Hong Kong, the Hang Seng index fell 22.14 points, or 0.16%, to close at 13,509.25.