Stocks ended lower Monday as investors digested the latest earnings news and analysts' comments after three weeks worth of gains.
The Dow Jones Industrial average declined 76 points, or 0.9%, to 8,368.04. The tech-heavy Nasdaq composite index lost 15.32 points, or 1.15%, to 1,315.81. And the broader Standard & Poor's 500-stock index was down 7.43 points, or 0.83%, to 890.22.
The economic report to watch Tuesday is October consumer confidence. Economic research firm MMS International expects consumer confidence to decrease to 88.5 from 93.3 in September. The decline would leave confidence at the lowest level since last November, when confidence was hurt in the aftermath of the September 11 attacks.
Investors will also get more quarterly earnings news. Tuesday's roster includes Dow component Procter & Gamble (PG ), PerkinElmer (PKI ), and Clear Channel Communications (CCU ), to name a few.
Among sectors on the move Monday, semiconductor-equipment stocks were strong on a rebound from last week's weakness. But health-care facilities stocks were down after UBS Warburg downgraded Tenet Healthcare (THC ) to reduce from hold.
Citigroup (C ) gained ground after Lehman Brothers upgraded to overweight from equal-weight.
On the earnings front, retailer J.C. Penney (JCP ) says it expects third-quarter earnings to exceed 21 cents a share, the upper end of analysts' forecasts. The company cited stronger October comparable department-store sales and continuing improvement in Eckerd's operating profits.
Newell Rubbermaid (NWL ) reported third-quarter EPS of 46 cents, a penny ahead of the Street estimate, but trimmed its earnings outlook for the fourth quarter.
American Express (AXP ) reported 52 cents a share, slightly better than expected and up from 22 cents a year ago.
In merger news, EchoStar Communications (DISH ) may revive its $18 billion bid for rival satellite broadcaster Hughes Electronics (GMH ), according to news reports.
Treasuries extended gains Monday, bolstered by Wall Street Journal and Washington Post "Fedwatcher" stories promoting the theory of a near-term interest rate cut by the Federal Reserve, according to economic research outfit MMS International.
European markets finished higher. In London, the Financial Times-Stock Exchange 100 index ended up 39.40 points, or 0.97%, to 4,090.5. In France, the CAC 40 gained 63.97 points, or 2.09%, to 3,120.85. Shares of Air France were up as the airline reached a wage agreement with its pilots.
And in Germany, the DAX Index jumped 96.95 points, or 3.13%, to 3,198.96, even though the Ifo business confidence index for West Germany fell to a nine-month low of 87.7 in October from 88.2 in September. Traders were encouraged by a report that the German government plans to cut healthcare costs, according to S&P MarketScope. Infineon Technologies gained as prices of high-speed computer memory chips reached their highest level in eight months.
In Asia, the markets ended higher. The Nikkei gained 31.22 points, or 0.36%, to close at 8,757.51, as a slide in automobile shares was offset by gains in IT-related shares with good financial results and outlook. However, lower trading volume indicated that investors were sidelined, awaiting the release of details how to deal with the bad loan crisis and the government's anti-deflation proposals.
In Hong Kong, the market gained 131.20 points, or 1.35%, to close at 9853.74.