The major stock indexes finished mixed on Tuesday. The Nasdaq closed lower on weakness in technology and telecommunications issues as a negative preannouncement from Nokia (NOK ) called earnings optimism in these industries into question. But the blue-chip Dow average recouped losses in late trading to finish slightly higher ahead of Alcoa's (AA ) quarterly earnings report after the market close.
The Dow Jones industrial average rose 12.44 points, or 0.12%, to 10,570.81. The broader Standard & Poor's 500-stock index lost 2.4 points, or 0.21%, to 1,148.17. The tech-heavy Nasdaq composite index declined 19.22 points, or 0.92%, to 2,059.9.
Trading volume was fairly light, with roughly 1.4 billion shares changing hands on the New York Stock Exchange. Volume on the Nasdaq was nearly 1.8 billion shares.
The major companies scheduled to report quarterly results Wednesday include Yahoo (YHOO ), Constellation Brands (STZ ), Research in Motion (RIMM ), and Genentech (DNA ).
Economic releases Wednesday are export and import prices and consumer credit.
Tech and telecom issues led the losses Tuesday after Nokia said it sees lower-than-expected first-quarter sales of 6.6 billion euros, a decline of 2% from last year vs. guidance of up 3% to 7%. The mobile phone maker sees earnings per share at the low end of its previous guidance. Nokia says mobile-phone and multimedia sales were below expectations. Nokia shares skidded nearly 19% on heavy volume of 4.7 billion shares.
Texas Instruments (TXN ), which supplies chips to Nokia, fell after JP Morgan downgraded the stock to underweight from neutral.
Brooktrout (BRKT ) shares plunged about 36% after the company said it sees lower-than-expected first-quarter revenue of $18.1 million to $18.3 million. The maker of communications systems software expects to breakeven or achieve a "small" profit.
On the bright side, Kellogg (K ) issued upbeat earnings guidance, saying first-quarter EPS growth will be about 30% on double-digit sales growth and favorable foreign exchange rates. The food maker raised 2004 EPS gudiance to $2.07 to $2.11 from a previous range of $2.05 to $2.09.
Cummins (CMI ) sees better-than-expected EPS in the first quarter and 2004, thanks to strong engine volumes and a broad recovery in many of its key markets.
Black & Decker (BDK ) raised its first quarter EPS outlook to 90 cents to 93 cents fromPS from continuing operations, vs. prior guidance of 65 cents to 70 cents. The power tools maker cited strong demand in its North American businesses.
In other company news, Boston Scientific (BSX ) says preliminary results of U.S. sales of its TAXUS Express2 paclitaxel-eluting coronary stent system from Mar. 8 to Mar. 31 were about $98 million, stronger than expected. UBS Financiall reiterates its buy rating on the stock.
News Corp. (NWS ) plans to reincorporate in the U.S. It expects the move will benefit all shareholders and significantly expand its shareholder base. Goldman says the news is positive, and sees at least 15% appreciation in the stock.
Late Monday, Bank of America (BAC ) says it plans to cut about 12,500 jobs, or 7% of its workforce, beginning this month.
In merger news, Barra Inc. (BARZ ) agreed to be acquired by Morgan Stanley (MWD ) for $41 per share in cash, or about $816.4 million.
REITs fell Tuesday on profit-taking as a higher interest-rate environment would tarnish the sector's luster of high dividends, and could raise financing costs, says Standard & Poor's MarketScope.
Treasury prices rebounded from a two-day slide. It was a pretty choppy session for Treasuries, as the market held the opening bid, but the lack of follow-through buying stalled upticks early on, says Informa Global Markets. Mortgage-related sales underpinned pullbacks. The $16 billion 5-year note auction results were mediocre, according to Informa Global Markets.
St. Louis Federal Reserve President William Poole spoke Tuesday on "Inflation Signals and Inflation Noise," and said it will take a "string of months" before the Fed knows whether the economic (meaning "jobs") drought is over. That still leaves the third quarter as a possibility for an initial Fed tightening, though hardly high odds right now, notes Informa. Poole thinks the economic expansion is firmly entrenched, and says that downside risks to inflation have receded.
European stock markets finished lower. London's Financial Times-Stock Exchange 100 index was down 7.9 points, or 0.18%, to 4,472.8 on profit taking before the long holiday weekend.
Germany's DAX index fell 19.27 points, or 0.48%, to 4,029.33 following news that German unemployment rose 44,000 to 10.4% in March from 10.3% in February, clouding the outlook for growth in Europe's largest economy after three years of stagnation.
In Paris, the CAC 40 index lost 29.25 points, or 0.77%, to 3,751.95.
Asian markets finished higher Tuesday. In Japan, the Nikkei 225 index rose 121.38 points, or 1.02%, to close at 12,079.7 -- closing above 12,000 for the first time since August, 2001. Advantest Corp. and Fuji Photo Film gained as a rally in the dollar erased concern the value of exporters' sales will be eroded. Banks such as Mizuho Financial Group advanced, making them the best group performer as the government report signaled that the world's second largest economy (Japan) will expend further.
In Hong Kong, the Hang Seng index gained 155.21 points, or 1.22%, to close at 12,886.97.