Stocks Finish Mixed
Stocks struggled to stage an afternoon rally Tuesday, eventually ending the session mixed, as sentiment continued to be bearish around scandal-plagued Wall Street. Blue chips slipped, while the tech-laden Nasdaq index managed a small gain on some positive earnings outlooks.
The Dow Jones industrial average lost 21.95 points, or 0.23%, to 9,687.84, with the biggest losses coming from General Motors (GM ).
The tech-heavy Nasdaq composite index added 15.54 points, or 0.99%, to 1,578.10. The Standard & Poor's 500 Index finished flat, up 0.05 point at 1,040.63.
Investors were hit with more negative headlines concerning the integrity of U.S. corporations and their executives. Dennis Kozlowski, who resigned as CEO of conglomerate Tyco (TYC ) Monday, was indicted for alleged sales tax violations Tuesday by the Manhattan District Attorney's office. On Monday, reports that he was the subject of a tax evasion probe related to his purchases of expensive artwork helped send the market into a tailspin.
In other corporate news, market-maker Knight Trading (NITE ) is the subject of a probe by securities regulators that it engaged in improper trading during the tech-stock boom of the late 1990s, according to a press report.
In technology, some positive earnings news helped lift the sector. Application software stocks rallied after Activision (ATVI ) raised earnings guidance. Network equipment makers were also up after Brocade (BRCD ) reaffirmed its previous EPS guidance for the third and fourth quarters.
But there was negative news from electronics manufacturer Flextronics (FLEX ), which tumbled after lowering earnings guidance for the current quarter.
Also in technology, Hewlett-Packard Co. (HPQ ) Chief Executive Carly Fiorina on Tuesday said she expects to cut 10,000 jobs by November 1 and another 5,000 jobs next year, after purchasing Compaq Computer Corp. last month, according to wire reports.
Among other stocks in the news, Lehman Brothers cut its revenue and cash flow estimates for AOL Time Warner (AOL ) due to an ongoing weak online advertising market, according to S&P. AOL shares were lower on the analyst report.
Plus, 29 U.S. states on Tuesday charged Bristol-Myers Squibb (BMY ) with illegal efforts to block generic rivals to its top-selling breast cancer drug Taxol, according to news reports citing court papers.
Auto stocks declined one day after the latest monthly measure of industry sales fell short of expectations. Among the gainers were gas utilities stocks, which rebounded from Monday's decline on news of the apparent suicide of the Charles Dana Rice, treasurer of energy company El Paso (EP ). Continued scrutiny by energy regulators about possible participation in "round trip" trades has also beaten down the group.
And in the currency markets, the dollar fell further against the euro and the yen, despite another intervention by the Bank of Japan to stem the yen's rise.
U.S. Treasuries ended lower, after the mild comeback attempt by stocks. No major economic reports were due Tuesday.
Looking ahead to the end of the week, reports on May unemployment and wholesale inventories and consumer credit for April were due June 7.
European stock markets ended solidly lower.
In France, the CAC 40 fell 161.27 points, or 3.82%, to 4,065.88. Selling was prompted by the weak performance in U.S. equities, which overshadowed news that the French purchasing managers' index rose to 52.8 in May from 51.7 in April.
And in Germany, the DAX Index lost 122.16 points, or 2.57%, to 4,625.79, even though German May purchasing managers' index rose to 49.7 from 49.1 in April. Traders also were restrained by the weakness in U.S. stocks.
In London, the markets were closed for the second day of a two-day holiday celebrating the Queen's Jubilee. Trading will resume Wednesday. On Friday, the Financial Times-Stock Exchange 100 index finished up 44.30 points, or 0.88%, to 5,085.10.
In Asia, the markets ended with losses. The Nikkei plunged 248.32 points, or 2.09%, to 11,653.07. Stocks deepened losses in the afternoon, led by exporter shares on growing pessimism over the global stock market. In Hong Kong, the market lost 47.25 points, or 0.42%, to 11,312.55.