U.S. stocks closed mixed Tuesday as merger news involving Cisco Systems (CSCO) lifted some tech issues while the broader market fell on a third-quarter sales shortfall at Johnson & Johnson's (JNJ) and a reported rating downgrade of Goldman Sachs (GS) by influential analyst Meredith Whitney. Investors remained uncertain ahead of a slew of earnings reports due over the next couple of weeks.
Intel's(INTC) reported third-quarter results after the close of trading Tuesday. The chipmaker's sales fell 8% to $9.4 billion. Net income was $1.9 billion, or 33 cents per share, versus $2.0 billion, or 35 cents a share, in the year-ago period. Both numbers were better than Wall Street projected and Intel offered better-than-expected sales guidance for the fourth quarter.
Major banks were expected to release results later in the week.
On Tuesday, the 30-stock Dow Jones industrial average finished lower by 14.74 points, or 0.15%, at 9,871.06. The broad Standard & Poor's 500-stock index was down 3.00 points, or 0.28%, at 1,073.19. The tech-heavy Nasdaq composite index gained 0.75 points, or 0.04%, to 2,139.89.
On the New York Stock Exchange, 17 stocks were lower in price for every 13 that advanced. Breadth on the Nasdaq was 15-12 negative.
The dollar fell. Treasuries rose. Oil and gold futures finished higher.
European equity markets ended lower with benchmark indexes down 1.08% in London, 1.15% in Paris and 1.19% in Frankfurt.
Asian stocks moved higher. Benchmark indexes climbed 0.60% in Tokyo, 0.79% in Hong Kong, and 1.44% in Shanghai.
With no major U.S. economic data due on Tuesday, third-quarter earnings were in the spotlight. Investors hope the results will support the theory that the economy is rebounding, says S&P MarketScope.
S&P 500 Cos. Reporting Later This Week Company Expected EPS Release W.W. Grainger, Inc. (GWW) Oct.14-8:00 a.m. ET CSX Corp. (CSX) Oct-14-8:30 a.m. ET Abbott Laboratories (ABT) Oct-14-9:00 a.m. ET JPMorgan Chase & Co. (JPM) Oct-14-9:00 a.m. ET Host Hotels & Resorts Inc. (HST) Oct-14-10:00 a.m. ET Linear Technology Corp. (LLTC) Oct-14-11:30 a.m. ET Xilinx Inc. (XLNX) Oct-14-5:00 p.m. ET Baxter International Inc. (BAX) Oct-15-8:30 a.m. ET Goldman Sachs Group Inc. (GS) Oct-15-9:00 a.m. ET Harley-Davidson, Inc. (HOG) Oct-15-9:00 a.m. ET PPG Industries Inc. (PPG) Oct-15-10:00 a.m. ET Citigroup, Inc. (C) Oct-15-11:00 a.m. ET Safeway Inc. (SWY) Oct-15-11:00 a.m. ET Southwest Airlines Co. (LUV) Oct-15-11:30 a.m. ET Amphenol Corporation (APH) Oct-15-1:00 p.m. ET Google Inc. (GOOG) Oct-15-4:30 p.m. ET Advanced Micro Devices Inc. (AMD) Oct-15-5:00 p.m. ET First Horizon National Corp. (FHN) Oct-16-8:30 a.m. ET General Electric Co. (GE) Oct-16-8:30 a.m. ET Mattel Inc. (MAT) Oct-16-8:30 a.m. ET Halliburton Company (HAL) Oct-16-9:00 a.m. ET Bank of America Corporation (BAC) Oct-16-9:30 a.m. ET Genuine Parts Co. (GPC) Oct-16-11:00 a.m. ET People's United Financial Inc. (PBCT) Oct-16-11:00 a.m. ET
Bank of America (BAC) slipped after the SEC said the bank agreed to waive attorney-client confidentiality in its Merrill purchase.
Cisco Systems said it has agreed to buy Starent Networks (CSCO), which helps wireless carriers support smart phones, for $2.9 billion. Cisco is paying $35 per share in cash and expects the deal to close early next year.
Johnson & Johnson reported third-quarter earnings per share of $1.20, vs. $1.17 EPS one year earlier, despite a 5.3% revenue decline. Wall Street was looking for EPS of $1.13. The company raised its 2009 EPS guidance to $4.54-$4.59 (excluding the impact of special items).
Johnson Controls (JCI) said its expects fiscal 2010 EPS of $1.35-$1.45, significantly higher than fiscal 2009, on sales of approximately $31 billion, up 9% from the prior year. The company cited sales, earnings and margin improvements in all three of its businesses: Automotive Experience, Power Solutions and Building Efficiency. It also expects higher global automotive production in fiscal 2010 vs. a year ago and a resumption of higher growth rates in global emerging markets.
CIT Group (CIT) announced that Jeffrey M. Peek has informed the Board that he plans to resign as Chairman and CEO, effective December 31, 2009.
American International Group (AIG) entered into a deal to sell its 97.57% share of Nan Shan Life Insurance Co., Ltd. to a consortium comprising Primus Financial Holdings Limited, the Hong Kong-based financial services firm, and China Strategic Holdings Limited, the Hong Kong Stock Exchange-listed investment company, for about $2.15 billion.
The ZEW Indicator of Economic Sentiment for Germany fell to 56.0 in in October from 57.7 the month before. Action Economics had been looking for a rise to 60.0.
Russia is hoping to sign deals worth US$5.5 billion with China as Prime Minister Vladimir Putin visits Beijing. The deals may lead to Russia selling more oil and gas to China - the world's second-biggest energy user. About 30 contracts in infrastructure, energy, mining, transportation and telecoms have been lined up. Russia is keen to bolster its economy, which President Dmitry Medvedev has said will decline by 7.5% in 2009 - far worse than earlier predicted. Trade between Russia and China has risen from less than US$10 billion to more than US$50 billion annually over the past six years. The heart of the relationship is Beijing's thirst for Russian energy - oil and gas make up more than half of Russian exports to China.