Stocks Finish Lower
Blue chips, unable to build on Monday's late-session momentum, faded late in Tuesday's session to to finish in the minus column, amid reports of renewed Middle East violence -- including news that that 13 Israeli soldiers had been ambushed and killed by a suicide bomber. Investors also fretted about Cisco Systems' (CPQ ) growth prospects. Techs, meanwhile, solidly lower on a mixed bag of profit reports and forecasts.
RBC Capital cut its estimates for Cisco, saying that information technology spending continues to be delayed and reduced, according to Standard & Poor's. While the RBC analyst believes Cisco is on track to meet third quarter estimates due to a good March, the IT capital spending environment continues to remain tough, he adds.
Also on the earnings front, Compaq (CPQ ), which is looking to merge with Dow member Hewlett-Packard (HWP ), informed investors late Monday that its first-quarter results would either meet of beat current Wall Street estimates, according to wire reports.
Plus, JDA Software (JDAS ) on late Monday boosted its profit and revenue targets for the first quarter on the back of strong software sales.
Retailers also advanced on better earnings prospects. Among the gainers were Lands End (LE ), Kenneth Cole (KCP ) and Abercrombies & Fitch (ANF ). Other groups on the rise included makers of photo products and motorcycles.
But overall, the market was lackluster. Many traders were on the sidelines, amid growing uncertainty about the strength and durability of the economic recovery.
The Dow Jones industrial average -- which meandered in and out of negative territory -- closed down 40.41 points, or 0.39%, to 10,208.67. The Nasdaq Composite index was down 43.43 points, or 2.43%, to 1,742.44. And the broader Standard & Poor's 500 index, meanwhile, slipped 7.51 points, or 0.67%, to 1,117.60. Networking equipment companies were among the losers on th4 Cisco news.
Oil futures, meanwhile, were off record highs after Saudi Arabia vowed to make up for any supply shortage that might be caused by Iraq's decision to halt exports for 30 days.
U.S. Treasuries ended higher. Middle East conflict and diplomacy continued to tug and propel price action on U.S. assets, with the latest developments sideswiping stocks and fueling Treasury gains.
European markets finished mixed. In London, the Financial Times-Stock Exchange 100 index was up 1 point, or 0.02%, to 5,179.60. In economic news, UK manufacturing production rose more than expected 0.4%, industrial production fell 0.2%, which weaker than expected. In France, the CAC 40 added 32.03 points, or 0.72%, to 4,463.91. In Germany, the DAX Index lost 4.38 points, or 0.08%, to 5,175.95.
In Asia, the markets ended mixed. Japan's Nikkei plunged 238.40 points, or 2.10%, to 11,114.49, dragged down by tech shares after the world's biggest computer maker, IBM, said Monday that its first quarter profit fell short of forecasts. In Hong Kong, the market added 10.01 points, or 0.09%, to 10733.69.