Stocks stumbled lower on Wednesday as investors brushed aside reassuring economic data showing inflation is under control to fret over mixed earnings news.
The Dow Jones industrial average lost 88.82 points, or 0.84%, to 10,539.97. The broader Standard & Poor's 500 index fell 11.35 points, or 0.95%, to 1,184.63. The Nasdaq composite index declined 11.35 points, or 0.95%, moving to 2,073.59.
Looking ahead, among the companies set to release earnings on Thursday include cable box maker Scientific-Atlanta (SFA ), auto parts outfit Delphi (DPH ), and insurance company Progressive (PGR ).
There is no major economic news due out on Thursday.
On Wednesday, the market was pressured by news from General Motors (GM ), a Dow component, which reported lower fourth-quarter earnings because of rising employee health-care costs and bigger losses from its European operations.
JPMorgan Chase (JPM ), the second largest U.S. bank, posted lower fourth-quarter earnings due to charges stemming from its merger with Bank One in 2004.
Cellphone hardware maker Motorola (MOT ) posted 34% higher quarterly earnings, topping expectations, thanks to strong sales of its phones. But Motorola was having trouble after predicting first quarter earnings that would at best meet analyst expectations.
Keeping stocks from bigger losses was news that Internet portal Yahoo (YHOO ) saw a surge in quarterly profit. Economics news was mostly positive. The Beige Book for the February Federal Open Market Committee meeting said that economic activity continued to expand in the latest period (late November to early January).
The consumer price index (CPI), a guage of consumer-level inflation, came in soft in December, with headline consumer prices down 0.1% vs expectations of flat to up 0.1%, according to Informa Global Markets. Core CPI, which strips out volatile food and energy prices, rose 0.2%, as expected.
First-time jobless claims fell more than expected, by 48,000 to 319,000 in the week ending Jan. 15 following a rise of 10,000 to 367,000 the week before.
Meantime, a report issued Wednesday indicated continued strength in the U.S. housing sector in December. Housing starts saw their biggest jump in more than 7 years, rising to a seasonally adjusted annual rate of 2.004 million units. That was ahead of expectations for a are 1.97 million unit annualized rate. In November, housing starts were at 1.771 million units.
Also supportive to stocks was a decline in oil prices, with NYMEX crude moving below the $48 per barrel mark--a reversal from the spike on Tuesday that was just shy of the $50 mark. Expectations for a buildup in the weekly EIA stockpile report were overshadowing the cold weather in the U.S. Northeast.
In other stocks news Wednesday, drugmaker Pfizer (PFE ), another Dow component, posted higher fourth quarter earnings, that nonetheless were a little lower than analyst expectations.
Low-fare air carrier Southwest Airlines (LUV ) reported lower fourth-quarter profits because of of record fuel prices.
After the market close on Tuesday, computer and services provider IBM Corp. (IBM ), a tech bellwether and Dow component, posted expectation-beating profit as product sales were helped by a weaker U.S. dollar.
In the telecom arena, Lucent (LU ) reported profit that was within expectations but its fiscal first quarter revenue estimate fell short of expectations.
Treasuries endured a choppy session Wednesday amid lots of news, but profit taking took over. The 10-year Treasury note was yielding 4.18%.
European stock markets closed lower on Wednesday.
In London, the Financial Times-Stock Exchange 100 index was off 5.60 points, or 0.12%, moving to 4,818.30 following reports that annual average earnings rose 4.5% in November, up from 4.2% in October. Also, jobless claims fell 6,200 in December and nation's jobless rate was steady at 2.7%. Pearson was lower as company's earnings forecast was as low end of expectations.
Germany's DAX index was off 5.16 points, or 0.12%, to 4,245.55 as German PPI rose 0.1% in December after falling 0.5%. Deutsche Bank was lower in sympathy with J.P. Morgan Chase decline in weaker earnings. Allianz was lower after Deutsche Bank downgraded the stock to a hold from a buy.
In Paris, the CAC 40 index slipped 6.01 points, or 0.16%, to 3,869.01 even though oil prices were heading lower. French rail and power workers were on strike today. Essilor and Pernod-Ricard were lower.
Asian markets finished mixed on Wednesday. Tokyo's Nikkei average fell 17.92 points, or 0.16%, to 11,405.34 on profit-taking following a two-day rally.
In Hong Kong, the Hang Seng index gained 74.41 points, or 0.55%, to close at 13,678.63.