Stocks finished Monday's session with small to moderate losses, as a morning rally failed to last, with weakness in the Nasdaq -- hovering just above the 2,000 level -- leading the slide. The index has given up most of its 2004 gains, and is now below the most recent low set on Feb. 4, says Standard & Poor's MarketScope.
The Dow Jones industrial average moved 9.41 points lower, or 0.09%, to 10,609.62. The broader Standard & Poor's 500-stock index finished down 3.12 points, or 0.27%, to 1,140.99.
The tech-heavy Nasdaq composite index was once again the worst performer among the major market benchmarks, falling 30.41 points, or 1.5%, to 2,007.52, below its most recent low set on Feb. 4. The index suffered from weakness in Internet, semiconductor, and software stocks, with the Philly Semiconductor Index (SOX.X ) down 2.8%.
The continuing dip in tech stocks isn't wildly surprising to analysts. Art Hogan, market strategist at Jefferies & Co., says that underperforming tech stocks are typical in the second year of a bull market. "In the first year, folks go after names that were priced to go out of business, but didn't ... and were popular at the end of the last bull market" he explains. "In the second year, [investors say] 'we've booked those gains, let's focus on quality now.'" Tech stocks may not be done yet: "they need to settle in a bit, and maybe correct more."
S&P Marketscope adds that "investors continue to rotate from aggressive sectors to more conservative areas, such as consumer staples."
There were no major economic reports scheduled for release Monday.
The ongoing M&A wave took on an international flavor Monday with news that Citigroup (C ) has agreed to acquire Korea's KorAm Bank for $2.73 billion. Citigroup shares finished somewhat higher Monday.
The Dow was led lower by weakness in United Technologies (UTX ) -- down 2.9% -- and Boeing (BA ) -- off by 1.6% -- on news reports that the U.S. Army is planning to announce the cancellation of its Comanche helicopter program.
Elsewhere in corporate news, Qualcomm (QCOM ) added 5.1% after saying it sees its total second quarter EPS as high as 49 cents on a revenue rise between 13% and 15%. The company sees second quarter revenue, minus its Strategic Initiatives (QSI) segment between 48 cents and 50 cents. Qualcomm estimates are based on shipment of about 31 million to 32 million Mobile Station Modem phone chips. S&P and Banc of America have raised their estimates for Qualcomm.
Home improvement retailer Lowe's (LOW ) posted fourth quarter earnings of 51 cents, vs. 40 cents on 7.3% higher same store sales, and 20% higher total sales. The company sees first quarter earnings as high as 67 cents, excluding items, on 6% to 7% higher same store sales, and 18% to 19% higher total sales. Lowe's ended 2.9% lower.
Dow component Wal-Mart (WMT ) reportedly expects its February same store sales to reach the high end of its sales forecast. Wal-Mart shares finished 1% higher.
Vertex Pharmaceuticals (VRTX ) gained 7.4% on news that the company's researchers have demonstrated for the first time that a selective small molecule inhibitor of Aurora Kinases, VX-680, profoundly reduces tumor growth in cancer models.
High-end purse and leather good maker Coach (COH ) says that its spring season results are trending above plan, and it now expects its second-half EPS to be at least 52 cents on sales of at least $615 million. Coach sees its fiscal 2004 earnings to be $1.24 on sales of nearly $1.3 billion. Coach shares edged 3.4% lower.
Symbol Technologies (SBL ) sees fourth quarter revenue of about $400 million, about 5% higher than its third quarter level, and 7% higher than a year ago. S&P has reiterated its hold rating. Symbol shares dipped 2.7%.
Networking systems company Novell (NOVL ) will report its first quarter earnings after the close of trading. Novell shares added 5.1%.
This week's earnings calendar continues on Tuesday, with home improvement retailer Home Depot (HD ) and media company Clear Channel Communications (CCU ) scheduled to report.
On Wednesday comes jewelry retailer Tiffany (TIF ). Restaurant chain IHOP (IHP ) is set to report on Thursday followed by Introgen Therapeutics (INGN ) on Friday.
The rest of the week's economics news slate will be heavy. On Tuesday, closely watched consumer confidence figures for the month of February will be released. The gauge is seen ticking up to 97 from 96.8 in the previous period, according to Informa Global Markets, the economic research firm. On the same day, a report on sales of existing homes in January is seen slowing to a 6.25 million annualized pace from 6.47 million in the previous month. And orders for big ticket items in January are expected to increase 0.5% from 0.3% in the previous month.
On Thursday, a report on new home sales in January is seen easing to a 1 million annualized pace from 1.06 million in December. And preliminary gross domestic product figures for the fourth quarter of 2003 are expected to show the economy grew 4.1% vs. 4.0% in previous estimates.
Treasuries finished higher in price Monday, gaining momentum into the afternoon. Some key factors during the day included "the dollar recovering off of Friday's lows and then holding, giving the shorts no satisfaction...and falling stocks," says economic research firm Informa. The day was void of any big economic data releases.
Comments from Federal Reserve chairman Alan Greenspan (whose comments on the labor market fueled dollar gains Friday) were the morning's main event, says Informa. Greenspan assessed household finances, saying they are in reasonably good shape, reports Informa. That "stems from the fact that elevated debt and debt service ratios are mostly the result of mortgage obligations. Debt levels have risen along with home ownership and home prices." Informa adds that Greenspan didn't mention the performance of household income. "That is where more pessimistic analysts often indicate to show the risk to demand from the household sector."
Foreign exchange developments were followed closely. "Despite the U.S. dollar pullback, pressure on Treasuries continues, as intervention seems likely to diminish." The U.S. dollar was trading at $1.255 vs. the euro, and $1.865 vs. the pound sterling.
European stock markets finished mixed on Monday. London's Financial Times-Stock Exchange 100 index gained 9.3 points, or 0.21%, to 4,524.30. Shares were aided by a Bank of England official's comments that U.K. economic growth prospects are the best since 1995, reports S&P's MarketScope. Laura Ashley shares were higher, although Burberry denied it planned a bid for the company.
In Paris, the CAC 40 was off its earlier highs, currently down 2.13 points, or 0.06%, to 3,731.15, on some bargain hunting. Wanadoo, Peugot and Renault were higher.
Germany's DAX index ended down 4.64 points, or 0.11%, to 4,068.71. Traders were ignoring a report showing that a European business optimism recovery might have stalled. Deutsche Bank was a bit higher amid takeover rumors circulating among banking stocks. Infineon Technologies was also higher.
Asian markets finished mixed on Monday. In Japan, the Nikkei 225 index gained 148.27 points, or 1.38%, to 10,868.96.
In Hong Kong, the Hang Seng index slipped 103.3 points, or 0.74%, to 13,765.07.